Engadget: Microsoft's XBox 360 To Offer HD Movie Downloads. Howe's Take: Great Idea, Poor Execution

Engadget claims that on November 22, Microsoft (MSFT) will announce the ability to download high-definition movies and TV shows to XBox 360 systems. Check out the article for the details, but the files are quite huge -- 5-6 Gigabytes for high-def movies, and 2.2 gigabytes for high-def TV shows. Given that the XBox 360s only have 20 gigabyte hard drives, that says to me that despite claims that TV shows are purchased, this is an attack on NetFlix (NFLX) rentals, not on TiVo (TIVO) or other HD digital video recorders, nor on the iTunes Movie store. And of course, you won't be able to use your credit card to buy these movies; the service only accepts Microsoft points.

The launch titles are fairly lame (do we really need Breaking Bonaduce and Jackass: The Movie in HD?), undoubtedly constrained by studio contracts and restrictions. But the concept is comparable to what we might expect from Apple's (AAPL) iTV device. And it sounds like Microsoft will be there first. Kudos to the XBox 360 team for an impressive technology first.

However, as regular readers know, technology rarely creates commercial success without smart marketing, and some of the marketing positioning of this service seems flawed. My bet is that the XBox hard drive size is a near fatal constraint on the popularity of the service, since it can only store 10 TV shows or three movies at a time. Since movies will take anywhere from four to six hours to download, yet can only be viewed for 24 hours, NetFlix probably doesn't have much to worry about. And if real appeal is high-definition movies, why would a viewer wait four to six hours to download it when they could watch it immediately using a service like Comcast (CMCSA) On-Demand?

As we found out with Amazon's (AMZN) Unbox Movie download service, the devil of movie downloading is in the marketing details. But my call is that the awkward constraints imposed will confine this download service to a curiosity for at least the next year, if not permanently. Meanwhile, you can be sure Apple, NetFlix, and TiVO will be taking copious notes.

Microsoft's XBox 360

Comments

[carleast:]

The words "nail" and "head" come to mind there Carl. It's like everything that Microsoft has done, as far as hardware is concerned, over the past few years. Good enough ideas that are very poorly executed. The worrying thing is that surely all of this wasted money on hardware will ruin their position in the software market. I hear many of you laughing at that idea but Microsoft are only trying to diversify into hardware because they know that in the future operating systems will be unique to every individual and held on the internet rather than on a specific computer. That will screw licensing laws and allow companies like google to provide a free OS to every man and his dog.

2006 Nov 09 09:14 AM

[Tom B:]

"Good enough ideas that are very poorly executed." This also describes the entire history of Windows.

2006 Nov 09 10:18 AM