...The MCE shell itself is dependent on these same services. If you build a shell without those dependancies for the XBOX 360, you'd have to cut out or alter the third-party support path and you're left with something a bit more versatile than a Tivo but
less than an MCE PC and with less memory and storage.
True. But I think there is a very strong strategic argument for Microsoft to compete with Yahoo, Apple, TiVo and the cable industry in the area of on-demand programming. While current MCE sales now account for (I think) at least 50% of PC sales (?) - I'd
like to know how many users are really hooking up their computer to their televisions? Or their cable service?
There's nothing wrong with MCE. The obstacle for Microsoft is that it's competing against the cable industry. Consumers are used to getting their entertainment from a set-top box - and most consumers aren't all that tech savvy (unfortunately).
Personally, I'm very excited about MCE, and I'm passionate about the potential of the Xbox 360 - I think that Microsoft is in for an incredible ride over the next 5 years, and both Jeff and David's teams will be making some key contributions. They've done
an amazing job so far.
But, at the same time, I think it's a real big mistake to ignore the potential of that little white box next to the HD set - because the 360 is strategically and uniquely positioned to become a major player in the area of on-demand programming. Storage,
we know, will be upgraded in the next year or so. So now is the time to think about what this business model is going to look like. If Steve Jobs can do it with the Video iPod, then there's no reason Microsoft can't do it, in
high-def, with the 360.
I was just reading about how the Hollywood unions (SAG, DGA, etc.) have sent a letter to major producers, wanting to get a cut of profits for online VOD sales.
Because Steve Jobs/Disney announced that popular shows like "Desperate Housewives" and "Lost" will be available as paid downloads on the Video Ipod.
Here's the question I'd pose to the MCE and Xbox teams: why are we waiting for Steve Jobs to take the initiative in this area?
The only reason the Hollywood guilds are being aggressive, is because they perceive that the Apple business model works.
I've got a real problem with this.
The Video Ipod is a sad little device, in my opinion. It only stores in standard def - it's umbilically connected to the iTunes music store for downloads. But Hollywood has embraced Apple because they've got a business model which works, an established distribution
network, and a very strong following among paying consumers of entertainment content.
The Xbox 360 (with or without the MCE connection) is a media-streaming monster. And it's always located right next to my HD television.
So why don't we hear about Microsoft's business model? When will we hear about the deal Xbox is making with Disney/ABC? Is there one? How about deals with the studios for movie content?
And no, I'm not talking about passive "carrier" partnerships. This is about tapping into PPV revenue streams.
Because if I could purchase a Hi-def version of ABC's "Lost" on Xbox VOD - then I wouldn't think twice about the new Video Ipod.