Microsoft's Weapon in the Original Programming Wars: Xbox 'Interactivity'

When Microsoft hired longtime CBS exec Nancy Tellem in September, it became clear that the company was serious about creating its own video programming. Now it's hinting at what will make its initiative different from those of the Netflixs and Amazons of the world: interactivity. Subscribers of Xbox Live – Microsoft's paid service that lets its 46 million subscribers play against friends and other people online – can already access video content through the device from content creators such as Netflix, HBO, and ESPN. But, at some point this year, Microsoft will start rolling out its own video programming to the Xbox device, Ms. Tellem said on stage on Monday at AllThingsD's Dive into Media conference. As such, she is overseeing a new Microsoft production studio in Santa Monica that already is staffed with more than 150 employees, she said. What kind of video content will we see? At least initially, it will be programming that appeals to Xbox's core user base of 18- to 34-year-old men. This could be everything from episodic series that aspire to reach HBO and Showtime quality to reality TV shows to live events. It wasn't clear whether Ms. Tellem was being purposefully vague in describing Microsoft's focus or whether the company will really invest in all different types of video programming to test out what types resonate the most. What is clear is that the new division will be focused on making programming that takes advantage of the best of Xbox and Kinect technology. Asked for specifics of how forthcoming video content will be interactive, Ms. Tellem gave a hypothetical example of a viewer having the ability to purchase tickets from their Xbox to go see a standup comedian whose live show they are currently watching through the device. A more impressive example is the idea of being able to use the voice commands that Kinect allows to do things like surface background information on each character while watching a show. But those are just starting points, said Yusuf Mehdi, Microsoft's senior VP-interactive entertainment business; Xbox and Kinect will eventually allow for interactive TV elements "you never dreamed of before." The outstanding question is whether TV viewers really want TV to be more of a hands-on, lean-forward experience. While bells and whistles may increase a viewer's engagement with a piece of content, the quality of the programming will likely still be the deciding factor in whether viewers tune in to begin with. Ms. Tellem and Mr. Mehdi said they had not decided whether the forthcoming Microsoft video programming would be included in the current price of Xbox Live subscriptions ($5/month) or whether there would be additional cost involved. It will, they said, be monetized through advertising.

Microsoft's Weapon in the Original Programming Wars: Xbox 'Interactivity'

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