Microsoft Announces Movie/TV Download Service for Xbox 360

| About: Microsoft Corporation (MSFT)

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Coming to Xbox 360: Films and TV [Wall Street Journal]

Summary: In an effort to push the Xbox 360 envelope, Microsoft announced yesterday it will begin offering downloadable movies and TV shows. The service, called Xbox Live Video Marketplace, will launch Nov. 22. Partnering entertainment companies include CBS, Viacom's MTV, Paramount, and Warner Brothers. VP Peter Moore called Xbox 360 "an entertainment amplifier for the living room," but analysts say movies and TV will remain secondary to Xbox's gaming focus. Xbox competitor Sony's PS3, which should be released later this month, uses the much-touted Blu-ray optical-disc technology that Sony is XBox 360 vs PS3looking to establish as a standard for high-def movie playback; it also plans to deliver content over the internet, although it hasn't said how. MSFT said pricing would be competitive with rival sites like iTunes Store and Cinema Now, where TV shows cost $1.99 and movie rentals from $2.99-$3.99. Users who rent a movie from Microsoft will have 24 hours from the moment they first start playing it. Some videos will be offered in high definition for a "slight premium." Xbox is already connected to a TV set, which might give it an edge over competitors, but it also pays a penalty with relatively sparse memory that would only store 16 hrs. of standard quality video, or 4.5 hrs. of high-def; Microsoft says once a user has payed to buy a video, he will be allowed to re-download it for free.
Related links: Andrew Schmitt's take on the announcement • Thomas Hawk says Xbox will soon own your living room • Davis Freeberg says the new service puts Microsoft in competition with video store rentals • Carl Howe looks at how the imminent PS3 release is likely to affect Xbox
Potentially impacted stocks and ETFs: Microsoft Corp. (NASDAQ:MSFT), Sony Corp. (NYSE:SNE), CBS Corp. (NYSE:CBS), Viacom Inc. (NYSE:VIA), Time Warner Inc. (NYSE:TWX), Apple Computer Inc. (NASDAQ:AAPL), Blockbuster Inc. (BBI)

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