Microsoft Looking to Undercut Cable Companies with Xbox TV?

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Well here’s a new one. Microsoft is apparently in negotiations “with TV networks to create a new subscription-based TV service on its Xbox gaming console,” according to Reuters. This information comes from sources who “asked not to be identified,” so take it all with a grain of salt.

From what it sounds like, this offering would be different from on-demand and pay-per-download offerings from the likes of Netflix, Apple TV, and Amazon, and would instead behave similarly to how your cable service currently works.

Unlike most run-of-the-mill cable subscriptions, though, you’d theoretically be able to subscribe to individual channels on a more a la carte basis or smaller packages of similarly-themed channels.

That’s where this whole rumor goes off the tracks a bit. If successful, Microsoft will have realized the dream of a la carte cable that most consumers have had for years. The networks would get to keep double-dipping by charging subscription fees and running commercials, so they should be happy with this arrangement, too.

Expect cable operators to fight something like this tooth and nail, though. And don’t expect it to be cheap unless you subscribe to only a fraction of the channels. Just because you can subscribe to one channel at a time doesn’t mean the networks won’t want to charge you $5 to $10 per month for each individual station, for instance. They have a tendency to overvalue their content, believe it or not, but Microsoft’s got deep pockets so perhaps it might subsidize the service a bit in order to get it off the ground.

Whatever the case, these unnamed sources told Reuters that such a service “may not arrive for another 12 months, but early discussions have been productive.” That ought to give currently-available competitors plenty of time to either react or hammer out their own deals.

More on Techland:

Earth to Google TV: The Big Networks Aren’t Coming Around

Hulu Plus Drops to $8 Per Month

Dish Thinks Streaming TV Sites Should Delay Shows 30 Days

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