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Weekend Tech Scan: What are Microsoft, Amazon doing to keep up with TV changes?

Both Microsoft and Amazon are doubling down on their versions of TV in the future. Who has the better idea?
Microsoft has been upgrading Xbox with tiles and other improvements positioning the popular device for the changing TV/video market.

Microsoft has been upgrading Xbox with tiles and other improvements positioning the popular device for the changing TV/video market. Skip Ferderber

“Something’s happening here . . .

“What it is ain’t exactly clear . . .”

-- Bufffalo Springfield,  November 1966

Television as we know it is undergoing a remarkable transformation.  Several events. announcements, and rumors this past week, especially from hometown favorites Microsoft and Amazon, made it crystal clear that no one has a clue about what precisely is going on — only that this is no time to be doing nothing.

Let’s start with a factoid. Television viewing is down slightly for the second straight year, according to a Nielsen study.  Some of it is due to changes in the U.S. population, but according to Media Daily News, some is due to “changes in the media technology composition of U.S. homes.” It’s just not clear how much is due to tech. 

“We continue to see increased media use proliferation, fueled by consumers able to watch professional, long-form video delivered traditionally and over the Internet by a number of devices, such as game consoles, computers, smartphones, tablets and over-the-top streaming like Apple TV,” said a Nielsen spokesman.

Someone needs to understand it better: The same report says that TV penetration in American homes will be 95.8 percent by next January.

Microsoft’s Xbox division has been reading the same set of tea leaves. Over the last two years, it’s been attempting to expand the role of the Xbox from just a gaming console (although it’s clearly the world’s most popular game unit) to a home media center embracing live TV, TV cable channels, on-demand movies, and shows and music. 

This week, the rumor mill suggested that Microsoft was about to launch a cell phone plan-like service for the Xbox:  An Xbox 360 with 4GB of memory and a Kinect motion controller for $99 — and a two-year contract costing $15 monthly.  At Best Buy, the same package retails for $299.99 without some of the services that Microsoft may offer such as Xbox Live membership that retails for about $60.

At $99, the Xbox would be directly price-competitive with TV set top boxes like Apple TV, Roku, Google TV, and Boxee. Microsoft potentially has an enormous advantage because of its well-known Xbox brand, and its presumed availablity at a significantly reduced price point.

It gets complicated, however, once you delve into the content available on set top boxes.  Microsoft currently has the usual garden variety of on-demand or pay per view TV services -- subscription-based Netflix, HBO Go, Hulu Plus, as well as Best Buy’s CinemaNow and its own Zune store—and the free Crackle movie service.  And there’s no forgetting Xbox’s broad range of games.

But set-top box content has undergone its own revolution, with content Microsoft may or may not be interested in acquiring.  If Microsoft sticks only to the tried and true and believes the public will want the box because of its technology, and not feel the need to explore the wide range of available content, it may miss the boat it’s trying to urge people to board.

Of particular interest is the Roku box: originally designed for bringing Netflix to your home TV, and now with a strange but vibrant life of its own.  With an entry point price of $59.99 (and prices up to $99 for more full featured units), Roku offers most of the same content as the current Xbox but with 450 channels: a wide variety of free and paid channels that stretch the definition of “TV.”  

On the “pay” side are Netflix, Hulu Plus, Amazon on Demand, and  HBO Go; radio stations such as Pandora, TuneIn Radio, Radio Paradise,  Shoutcast Radio and Live365. Among other channels, I’m particularly fond of  “Drama Fever,” featuring subtitled Korean and Chinese TV series; CNN International, BBC World News, Wall Street Journal TV, Al Jazeera English, independent film channels such as Vanguard, and TV channels including the UK’s Acorn TV.


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