However, it now appears they weren't as close as originally reported and their plans have been put on hold indefinitely. It seems TV executives weren't impressed enough to offer terms acceptable to Microsoft, and the deal fizzled.
Citing an unnamed media executive personally involved in the negotiations, Reuters says Microsoft got so far as demonstrating their TV platform in action, but ultimately decided the price of programming was too high. Their source reportedly said, "They built Microsoft TV, they demoed it for us, they asked for rate cards but then said 'ooh ah, that's expensive."
Combining this new information with previous reports about Microsoft TV, it appears their plan was to provide both Netflix-style video on demand, but with more current content, and a traditional (but web-based) pay TV service. In addition, they seemed to be considering producing exclusive content of their own.
Of course this is nothing new or shocking. Like so many other industries built around legacy technology, they have fought nearly every attempt to develop new business models.
Network executives have licensed TV series to Netflix with key episodes missing, demanded Hulu block viewers who chose to watch their free shows (and commercials) on TVs instead of computer monitors. On the other side of the equation, cable providers are punished if they help paying customers extend TV service beyond the living room.
Should we expect anything different from a rumored cloud-based pay TV service from Apple, rumored to replace channel bundles and tiers with a la carte channels? History says that's unlikely unless Apple is willing to let their broadcast partners dictate terms.
Written by: Rich Fiscus @ 16 Jan 2012 22:10