Microsoft is reportedly in talks with several media companies to license TV networks for a new online pay-TV subscription service.
Microsoft plans to offer the new service through devices such as the Xbox according to sources familiar with the plans who spoke to Reuters. Microsoft is proposing a “virtual cable operator” which will be delivered over the Internet and charged with a monthly fee. Microsoft has also suggested that cable companies could use the Xbox as a device to authenticate existing cable subscribers to watch shows and interact with their Xbox LIVE friends. Microsoft offers a similar service in the UK where Sky customers can use their Xbox LIVE avatars during sporting events.
Microsoft is also floating the idea of selling individual channels similar to the ESPN deal on Xbox LIVE. The revelations come at a time when both Apple and Google are attempting to position their software in the living room. Apple recently issued a second revision of its Apple TV hardware which streams TV and movie content over the Internet. Google is also partnering with TV manufacturers to provide its own software and interface direct to TVs.
Reuters says that the software giant is unlikely to launch any service in the next 12 months. The Redmond based company is reportedly “mulling feedback” it has received from developers, including the costs and logistics of such a service. Microsoft refused to comment on the reports. “Microsoft does not comment on rumor or speculation” said a company spokesperson.