Microsoft tunes in to IPTV

Microsoft is about to jump back into the TV game, according to sources that predicted the software giant would partner with content providers to become a “virtual cable provider”.

The sources said Microsoft had held talks with TV networks in the US aiming to create a new subscription-based TV service on its Xbox gaming console that would rival IPTV efforts by Google, Apple and Netflix.

Already in talks with several big media content providers in the US, it is not yet clear how the model would differ from Microsoft’s UK deal with Sky, which end users can already access through the Xbox.

The emergence of platforms like that increases the value of content and brands and those who create the content and channels that actually the business and drives consumer demand

Microsoft was also exploring the possibility of creating tailored programming packages for customers, the sources said, while the company would also hope to sell more individual channels directly to subscribers.

According to the sources, the service may not arrive for another 12 months, but early discussions had been productive.

News of Microsoft’s plans come as the pay-television industry is moving to allay investor concerns that consumers are fleeing expensive subscription packages for cheaper online services, from YouTube to Netflix.

While sources from Microsoft chose not to go on record, News Corp chief operating officer Chase Carey said the arrival of alternative TV services gave cable and broadcast networks another way to reach fragmented audiences.

“The emergence of platforms like that – from people like Microsoft, which is really more a theory at this point, or Netflix – increases the value of content and brands and those who create the content and channels that actually the business and drives consumer demand,” Carey said.