At last, TV programming that only works with one specific brand of device. Microsoft has announced that its first original series for Xbox Live should be available in the first or second quarter of 2014. Clearly, this is something consumers have been eagerly waiting for. Oh… wait a minute…
A Different Animal
Nancy Tellem, president of Entertainment and Digital for Microsoft, offered the update at Variety magazine’s Dealmakers Breakfast, in Los Angeles. She noted that the development process has been slower than expected. But she stated that some sort of exclusive video programming will be coming soon to the Xbox One. She did not specify whether this would include the Halo project announced by Microsoft last summer, to be produced by Steven Spielberg.
A former CBS exec, Tellem had some trouble explaining exactly how this Xbox video service was going to fit into the TV universe. “We aren’t Netflix, we aren’t Amazon, we’re a different animal,” she said. “We’re neither or we’re a little like them. It all depends.” However, she did admit that the service would include content not available any other way. “We’re talking about exclusives, exclusive first windows, exclusive second windows.”
“Tellem is developing shows for Xbox as owners of the company’s consoles spend more time consuming video content than playing video games,” reported Variety. Unfortunately, no evidence was presented that Xbox owners are in fact spending more time consuming video content on their Xboxes than they are in playing games.
Tellem actually spoke of “the TV Everywhere model,” blithely glossing over the fact that Xbox isn’t exactly “everywhere.” In fact, according to the Variety article, it’s only about 48 million Xbox Live subscribers globally, out of about 72 million Xbox consoles. And that’s for the free version Xbox Live. The paid subscription tier (formerly known as Xbox Live Gold) is thought to be only about half as populous. Microsoft does seem to be giving itself a bit of an advantage, putting Netflix and most other video services behind its Live Gold paywall, while offering its own Xbox Video service on the free tier. (Of course, this is in addition to any fees for the content services themselves.)
But what’s most glaringly glossed over in the Variety article is that this is a whole new type of video service, unlike any ever seen before. A video service tied to just one brand of hardware device. In other words, proprietary TV.
Judging by Tellem’s comments, there will be Xbox video content that consumers will be able to see only if they buy an Xbox. That’s vastly different from services like Netflix, which are tied to no hardware platform. Or from Microsoft and Sony’s previous video services, which offered no exclusive content. It’s one thing for Netflix to develop original content like House of Cards, or for Amazon to do Alpha House. These shows can be seen on many types of hardware. It’s very different for Microsoft to develop exclusive video content that simply can’t be seen without owning the company’s own proprietary hardware. It would be like needing a Warner CD player to listen to certain albums.
It’s hard to escape the feeling that we are now seeing the true motivation for the whole Xbox program. Considering the R&D and marketing costs, the Xbox line has not exactly been a goldmine. And Microsoft’s launch event for the Xbox One was almost too eager to emphasize video over gaming. Is this – as we’ve always suspected – the master plan? To establish a living-room beachhead for totally locked-down video? And then to charge fees on top of fees (Xbox Live subscription plus content subscription) for it?
If that is the plan, the odds would seem to be against it. We know that consumers aren’t buying media boxes. The best-seller is thought to be the remarkably primitive Apple TV, with just 15 million units sold. The Xbox 360 reached sales of 72 million (80 million by some estimates, though not all necessarily still in active use) mainly as a result of demand from gamers. Logic would suggest that there must be a market for new types of integrated, interactive hardware+video services… but empirical evidence so far offers no corroboration whatsoever.
At best it’s a huge gamble. Consumers are a strange, fickle bunch. But will they really rush to support what amounts to proprietary TV, linked to a single brand of hardware?