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Pay-TV Competition on the Game Consoles

Market study findings from research consultancy TDG predicts that console-affiliated media portals such as Microsoft's Xbox LIVE and Sony's PlayStation Network will soon become formidable competitors to incumbent Pay-TV services.

Leveraging broadband-enabled game consoles as Over-the-Top (OTT) video platforms -- thus bypassing cable, satellite and telco TV operators -- these companies will offer a compelling alternative to traditional TV programming by providing a more immersive, interactive video entertainment experience.

"The launch of Microsoft's 'Experience' and the Xbox LIVE Netflix streaming video service is a perfect example of how potent these services will soon become," notes Michael Greeson, president of TDG. "There is little doubt these services are finally ready for prime-time."

TDG points to several related findings:

- Even before the launch of "Experience," Microsoft's Xbox LIVE had amassed some 15,000 movies (1,000 of which are HD) and some 13,000 TV shows for download-to-own. Xbox LIVE was the first online video portal to offer HD downloads for TV viewing.

- The Netflix partnership adds 12,000 movies and TV programs to the mix, all for free streaming to Netflix subscribers. This enables Xbox 360 users to access on-demand movies and TV shows within the Xbox Experience social environment with a click of their remote.

- Sony's PlayStation Network has collected close to 1,000 movies and hundreds of TV programs for download-to-own. As well, it has announced plans to expand dramatically its video library in the next few months in order to compete with Xbox LIVE.

- Sony's CEO Howard Stringer noted, "Sony's unique position in electronics and entertainment will enable us to provide specialized offerings for Sony customers directly to their televisions -- outside conventional distributors, and without the need for any set-top box."

- Even Nintendo, staunchly dedicated to pure gaming experiences, is working with Fujisoft to introduce "Everybody's Theater Channel" to Japanese Wii users in December 2008. Clearly, this is just the beginning of a major new OTT trend.

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