Microsoft cancels plans for paid Xbox Live TV service

According to an anonymous Reuters source, Microsoft no longer plans to offer a paid TV service through Xbox Live. The licensing costs for the provision of recent TV programs were too high for the console builder.

Reuters claims understood from a media company director that Microsoft has discontinued plans to offer a paid TV service through Xbox Live. “They built Microsoft TV, they showed it to us, they asked for our rates and then were shocked by the price,” said the media chief. According to the source, the licensing costs that Microsoft would have to pay were so high that the business model of the service was no longer profitable. Microsoft would therefore have put the plans on hold.

Microsoft wanted to offer a separate TV subscription via Xbox Live, which was christened Xbox Live Diamond. Unlike Netflix, a service that grew strongly in 2011, Microsoft planned to offer recent programs, driving up Microsoft’s licensing costs. Microsoft wanted to compete with existing cable companies.

According to the same source, Microsoft is still looking to partner with TV providers, but in a slightly different way. The console builder now no longer wants to push cable companies out of the market, but offers TV companies a place on Xbox Live. However, this is no longer about live TV. For example, at CES, Microsoft announced a partnership with media giant News Corp, which will allow apps from Fox Broadcast, Fox News, IGN and The Wall Street Journal to be found in the Xbox dashboard in the future.