Microsoft’s Xbox Live Gold Service Beefs Up Its On-Demand Menu

On Tuesday, Microsoft (NASDAQ:MSFTbegan offering Comcast‘s (NASDAQ:CMCSA) Xfinity TV, Time Warner’s (NYSE:TWX) HBO GO, and MLB.TV via an app for Xbox Live Gold members, a service that delivers TV and music programming, in addition to online gaming, through the Xbox 360 console.

The Xfinity TV app provides Comcast’s TV and Internet subscribers with on-demand access to the cable company’s entire programming library, and lets those with Kinect for Xbox 360 search the Xfinity TV video library by voice or motion-command. Comcast Steampix subscribers also can access the programming on their smartphones and other mobile devices.

Ryan Lawler of Gigaom notes that the partnership is Comcast’s latest effort to expand access to its content. Comcast Xfinity TV subscribers also can watch its offerings on Apple’s (NASDAQ:AAPL) iPad and Samsung’s (PINK:SSNLF) connected TV. The partnership with Microsoft, however, has significant potential to expand the reach of Xfinity TV; HBO GO, which includes virtually all of the HBO catalog; and MLB.COM, which is seen as a competitor to MLB programming delivered by DirecTV (NASDAQ:DTV).

Microsoft’s Xbox Live has more than 40 million members and already offers Xbox apps for Verizon‘s (NYSE:VZ) FiOS service, Viacom’s (NASDAQ:VIAB) Epix TV service, Sony’s (NYSE:SNE) music video site Vevo, Walmart’s (NYSE:WMT) Vudu media services, and Google’s (NASDAQ:GOOG) YouTube. While the service has primarily been a platform used for online gaming, Microsoft says that entertainment usage on Xbox Live has now surpassed multiplayer game usage, which has continued to grow year over year.

That could bode particularly well for Comcast, which is looking for ways to retain customers tempted to disconnect cable programming for online streaming services such as those offered by Netflix (NASDAQ:NFLX) and Hulu.

A net neutrality issue?

One key feature of Comcast’s on-demand service is that content streamed through Xbox 360 Live does not count toward Comcast subscribers’ 250GB monthly data limit. But that feature also is a point of contention for net neutrality advocates, who say it is essentially an end run around regulations that bar providers from restricting or favoring access to content on the Internet.

The data cap limit does apply to HBO GO and MLB.COM, the advocates point out; only the Comcast content is exempted. Comcast says the Xbox content is being delivered over its private IP network and not the public Internet, and Ars Technica points out that net neutrality rules exempt a “managed services” category of IP-based services, which is what Comcast is using.

In any case, the Xbox’s clout as a complete set-top entertainment device will strengthen if more content providers like these team with Microsoft for distribution.

Microsoft, meanwhile, gets to sell more Xbox 360s or next Xboxes, with the promise of offering more digital content. It may also help Microsoft put some daylight between it and rival game console makers Sony and Nintendo (PINK:NTDOY).



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