Why Microsoft Is Whipping Apple in TV

Steve Wildstrom / March 28th, 2012

Farhad Manjoo at Slate has a good piece today on how Microsoft is already delivering many of the expected features of the tech world’s favorite unicorn, the Apple television. The combination of the Xbox and the Kinect sensor, together with a rich array of video services available through Xbox Live, provides a voice- and gesture-controlled user interface for your TV.

Photo of Xbox and Kinect

Xbox and Kinect (iStockPhoto)

Xbox Live today offers a considerably richer array of video services than the current Apple TV set top box, and that is not likely to change quickly, no matter what sort of integrated hardware Apple comes up with. This competition isn’t about hardware. It’s about securing the availability of content in the Byzantine world of of content owners and distributors. Here, Microsoft is miles ahead of Apple and likely to remain so.

In Hollywood, big, bad Microsoft is viewed as something of an honest broker, a company that is prepared to work with the content owners rather than steal their business. Apple is viewed as the company that destroyed the music business and the company that gobbles up all the profits of any business it enters.

Microsoft, in fact, has been courting Hollywood for years. It worked closely with cable and satellite TV distributors on IPTV technology. Going back to the mid-1990s, its designed its Media Center software to be respectful of content owners. None of these overtures turned into particularly successful businesses, but they left Microsoft well-positioned for the future.

A crucial area where Microsoft is ahead of Apple is in delivering  cable content to TVs via the internet. It has deals with Verizon FiOS and, as of this week, Comcast Xfinity, to deliver select cable channels via Xbox Live. Subscribers to some cable or satellite services, including FiOS and DirecTV, can get HBO Go on their Xboxes. (The question of who can get what content is still way too complicated, but is slowly being worked out.)

The key is that studios and distributors view Microsoft as an enabler rather than a competitor and disruptor. And that could allow Microsoft to remain way ahead of A[[le for some time to come in the competition that matters–the fight for content.

 

Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.
  • PeterBlood

    All that sounds good until Apple does take it over with a slap on the forehead, why-didn’t-we-think-of-that, solution. Once again leaving Microsoft in the stagnant dust. Microsoft is now forever outclassed by Apple with two very different prevailing corporate cultures and MS is still too knee deep in solutions only a geek, and not an average user desiring less not more complexity, could love.

  • Viswakarma

    “…studios and distributors view Microsoft as an enabler rather than a competitor and disruptor.” Like fleas on mangy old dog!!!

  • The article’s logic alleges that Microsoft’s past failures positions it well for future successes. Maybe. But I can list a few failures which likely put in question your speculative argument: Windows Mobile, Zune, Bob, Bing, the MS “tablet.”

  • Hm

    Microsoft get on well with the studios because they were equally willing to try stupid ideas like DRM, which consumers hate, instead of getting on with making it ultra easy and legal to get at content for the vast majority of honest users, who are happy to pay when its easy and convenient. Things have got better in the last few years, but the TV / movie industry is still ripe for a proper digital revolution. Any content, anywhere, any time, on all your devices. Once again, Apple’s trump card will be its ecosystem and multiple devices, not any one thing.

  • puggsly

    So MS is ahead of Apple because the Xbox allows you to access the cable subscription you already pay for as long as you pay for the Microsoft Live service? And this access allows you to watch this content on the same TV you probably have a cable box for!

    And to be clear, HBO Go, Comcast, etc. already made these deals with Apple on the iPhone/iPad. Which, by the way, when used in conjunction with an Apple TV and AirPlay gives you access to the same content on that home TV but gives you mobile access as well, just without the monthly subscription cost of Live!

    Yep!! This is going to be a serious game changer!

    My guess is that Apple is working on getting access to things like HBO Go Ala-cart. So I don’t have to be paying the cable company for HBO, I can pay HBO directly. Now that will be a game changer!

  • Pingback: How to watch HBO Go on your Apple TV, sort of - CNET - Phone Questions()

  • Tthomcarl

    If it’s Microsoft it’s not in my home

  • synthmeister

    Whipping? I doubt it. Yes, MS might have some good content that Apple doesn’t, but I’d like to at least see some up-to-date revenue/profit estimates for X-Box TV/Movie offerings compared to the AppleTV.

    Last I heard, iTunes users were renting and purchasing over 400,000 TV episodes and over 150,000 movies PER DAY. And that was back in Dec 2010 when the new AppleTV was about to sell 1 million units in its first quarter on the market. I seriously doubt X-box users are renting or purchasing anywhere near 500K programs/movies per day. If you have figures

    http://techcrunch.com/2010/12/21/new-apple-tv-sales-to-top-1-million-this-week-itunes-tv-show-and-movie-rentals-soaring/

    The other problem is that while the X-Box is ‘strategic’ part of MS overall consumer strategy, it is barely a blimp in their profit compared to the investment. Meanwhile Apple barely has to invest anything in the AppleTV–they simply repackage an 8GB iPod touch and leverage a huge chunk of the Mac, iOS, iTunes, iPhoto ecosystem with very, very little effort.

    http://www.asymco.com/wp-content/uploads/2012/02/Screen-Shot-2012-02-13-at-2-13-2.53.43-PM.png

  • Donald Michael Kraig

    A totally clueless article. The Zune was a great MP3 player. Where is it now? Gone. The iPod, while way down in sales, is still the market leader. Windows phone was on the way up. The iPhone appeared and now it’s on the way out. Betamax was better than VHS. VHS won that battle and now both are gone. People get an XBox for games. Most do nothing else with it. Microsoft had ten feakin’ years to make a tablet people wanted and failed. The iPad is what people want, so much so that Google stole the interface. Businesses controlled by IT departments want Windows PCs. Everyone else wants Apple Macs.

    Until Microsoft can master the what RCA’s VHS and Apple’s Mac and iWhatever products have IN PEOPLE’S MINDS, it doesn’t matter what Microsoft offers.

    Nobody wants it.

  • neutrino23

    Thanks for the informative article. Before this I had no idea Microsoft was doing anything with televisions. Not likely to affect us much here as we don’t allow game consoles in the house.

  • jbelkin

    I know it’s tech OPINIONS but this guy is clearly not up to date nor has much history to back his accertions. It is because MS is NOT a honest broker that no Hollywood studio/TV networks were willing to work with MS on their vaulted Home Media Pc attempt. While the music lamented the loss of CD industry in the early days (where they could hide sales much better), they now fully admit Apple SAVED the music industry – and is now the largest MUSIC seller in the US. MS’s WMA, Zune and Plays4Sure have all failed – not so much with Zune but with the other two effort to lock up the music industry which also failed. So, you might want to read up on tech since 2006. The world has changed. As for the Xbox – MS is now and forever in a $20 BILLION dollar hole with the Xbox so unless they literally sell A BILLION of them, they will never be in the black on that project. Apple is not foolish. They might’ve only sold 10 million of Apple TV’s but ALL AT A PROFIT and all feeding into the itunes ecosystem. lastly, clearly you do not have an Xbox Kinect – if you want to want to watch a movie, yes, you can mostly do it via voice controls but it takes about EIGHT voice commands to navigate. If would be easier to yell at your kid to come downstairs ad manually put in a DVD. So while MS no longer loses money on selling Xboxes (as component costs have come down and they have written off the $20 BILLION), clearly by 2013, there will be another Xbox 720 that they have to sell at a huge loss so their cycle begins again and MS will be busy backpedling on teir WIn 8 Metro interface debacle … MS will be an option but it’s a weak option and consumers already reject MS unless it’s the cheapest solution as they have posioned their name with ten years of malware, idiotcy and poor technology. MS has been on a downward slide since 1998. They are done.

  • steve_wildstrom

    Not feeling a lot of love for Microsoft here. Some points:

    –I didn’t say all Microsoft failures positioned it for success. I said that failures that built relationships with content owners and distributors could pay off.

    –Apple has embraced DRM as enthusiastically as Microsoft. It’s true Apple helped kill DRM in music, but by the time Steve Jobs wrote his open letter, it was knocking over a feather.

    –The Microsoft of Xbox, unlike the Microsoft of Windows, SharePoint, SQL Server, etc., is very consumer-oriented. TV on Xbox is very easy to set up and use and the selection is a lot better than Apple TV’s. Getting services like HBO Go from an iPad to a TV via Apple TV and AirPlay works, but it’s a kludge that should make Jobs weep.

    –Yes, these services are currently only available to people who are already cable subscribers. But the MSOs are creeping (nothing moves fast in this industry) toward over-the-top distribution to non-cable subscribers. Yes, you are still going to have to pay for it because this kind of content is expensive. But you won’t need two subscriptions.

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