Microsoft's Marc Whitten, corporate vice president for Xbox LIVE introduces the ability to watch live TV, search, and listen to music on the XBOX 360 at the Microsoft E3 XBOX 360 media briefing in Los Angeles, California.
The practice of bundling is under fire, and has been for years. True, à la carte pricing would cost more on a per-channel basis (and relatively speaking), but I’d gladly pay more per channel per month for one or two channels I’ll genuinely watch, instead of $60 or $80 or $100 a month for hundreds of channels I never will. And don’t forget the political “feedback” component: How many times have you wished to keep or cancel a channel because you wanted to send a message of one sort or another? Backed away from canceling because it meant canceling everything? This all or nothing business only works, in terms of justification, when there’s one way to access content. These days, serious Internet-driven alternatives pop up annually.
But okay, let’s leave the cable-bundling debate aside: There’s another reason to frown (granted, small frown) at the Xbox Live-Verizon FiOS deal. You have to be both a FiOS TV and Internet subscriber to access it, for starters–that much you’d expect. But you also have to be an Xbox Live Gold member. Gold tier membership costs $60 a year, or $5 a month. You’re essentially paying extra, if you’re not already a Gold subscriber, for the “privilege” of not having to tap the “input” button on your TV remote when you want to switch from game-playing to TV-watching (assuming your Xbox 360 connects to a TV that’s already cable-wired, that is—for those planning to use the 360 with a TV that’s not connected, it’s probably a more justifiable perk).
Microsoft’s been sticking stuff like this behind the pay-wall for years now, and customers seem happy enough to pay the bill, but when you look at the revenue model, it starts to feel less like a “value” thing and more like gratuity. Microsoft rival Sony offers comparable features through its PlayStation Network at no cost, taking care to place original content (and not third-party front-ends) behind its PlayStation Plus pay-wall. Industry pundits have nothing but plaudits for Microsoft’s monetization skills, and I’ll tip my hat to Microsoft’s clear success here, but as long as less expensive alternatives exist from serious contenders, you’ll never convince astute consumers that paying more for “the same” equals more.
In a more ideal world, Verizon would allow customers to subscribe to content on a channel-by-channel basis (or at least in smaller, demographically informed bundles) directly over the Internet–no need for cable boxes or secondary subscriptions. And in that world, Microsoft would either enhance its tie-in service in a way that actually justified the Gold membership markup, or offer it outside Xbox Live’s pay-wall.
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Matt Peckham is a reporter at TIME. Find him on Twitter at @mattpeckham or on Facebook. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.