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January 09, 2008
Convergence moves on:Xbox will host BT's TV service
This BBC story about XBox from Microsoft linking up with BT's online services is a significant development and an important link up in a week which has seen a blow to Microsoft's X-Box and its support of the HD-DVD standard with Bluray seemingly taking a lead in this area however if you look at my comment about if they don't hurry up online services will make both DVD based systems a bit redundant seems to have been a well-placed one. Here we look at the process of technological convergence which often means that large companies are doing specific deals with other ones in order to try and get ahead in the market place. No single company has technological dominance across the board.
What Consumers are probably being offered:
On-demand films and sports content from the BT Vision service will be available via the Xbox games console from the middle of this year.
Desparately Seeking Audiences!
As usual media organisations are desparately seeking new audiences and reinvestment or repurposing of existing technologies is always a likely way forward:
Sales of BT Vision have been somewhat sluggish according to critics, with BT signing up around 100,000 subscribers since launching in November 2006.
How far is the X-Box developing into a domestic entertainment hub?
Whilst it is likely to make the broadband service gain a higher profile for BT customers must sign up for a 12 month BT Broadband contract. Unlike BT's own V-Box the X-Box is unable to deliver recording facilities because of hard-drive limitations. However as BT are patently aware of this is seems reasonable to presume that some sort of add-on external video recording hard drive will be made available at a reasonable price. For those household s sporting an X-Box or three then it will presumably be marketed as an attractive service for them. As a core marketing strategy of the X-Box Mind you watch this space if a recession starts to take hold, there are straws in the wind about the Chinese economy !)
Did Sony Pay Warner? If so How Much?
Whilst this week's Economist thought that it was 'game over' for HD-DVD I'm not so convinced. Certainly announcement's were pulled at the hugely important Consumer Electronics Show (CES) by Toshiba / Microsoft but that is hardly surprising given the brilliance of Sony's timing of the announcement. Yes I said Sony's becuase I don't believe for a moment that Warner weren't heavily bribed to make not only this default to Blueray but also to make the timing of the announcement to try and deliver a knockout blow against Toshiba / Microsoft. Toshiba had already pulled off the same trick but their timing wasn't perhaps so good:
Paramount, which had supported both formats, abandoned Blu-ray last year after Toshiba offered it tens of millions of dollars in marketing incentives. (See Economist link above)
At the root of this game is Microsoft. It's X-Box has a much larger base in the domestic environment than Playstation 3. Whilst the Economist points to twice as many Bluray discs being sold in 2007 this is not very many. They are still very expensive. flooding the market with cheap players and ensuring that HD-DVDs are readily available in rental outlets at a low price could still put Sony in the shade. Sany Vaios with Bluray are still very expensive and the technology was hugely expensive. Toshiba / Microfst still have some cards to play!