Microsoft is in the process of putting together a very interesting television project for its popular Xbox 360 console. In our humble view, this is a direct counter to what Apple has in mind for their newly refreshed Apple TV.
Why? Because Microsoft has exactly what Apple lacks: boxes in living rooms. According to industry numbers, Microsoft has sold a total of 44.6 million Xbox 360s, putting that console miles ahead of the so far diminutive (in comparison) sales of the Apple TV.
Microsoft actually has another advantage that Apple seems unwilling to match, and could not at scale even if it wanted to: a subscription enabled audience.
There are millions upon millions of Xbox live customers, and ex-Xbox live customers for whom Microsoft has a credit card on file, meaning that the friction to boost their level of subscription to include another form of content is low. The upsell would not be difficult, especially if the value proposition was strong (high content levels coupled with a fair price).
Microsoft has the devices needed for its service in the hands of the consumers who already have shown a predisposition to buying content (games, etc), and have high-speed internet in their living rooms. It’s a recipe for success. Compare that to buying another device (Apple TV), and then having your living room split between games and other content, something makes little sense. Why divide when you can unify your devices and their purposes?
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As the Microsoft offering is supposed to be subscription based, and while Apple wants to rent you shows one at a time (a formula that has warranted limited content deals), there are sure to be some partisans who prefer Apple’s method. However, for the average media-consumer, the Xbox system is most likely simpler, faster, and easier.
Nice try, Apple.
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