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Xbox adds new on-demand content

Steve Henn Dec 5, 2011

Kai Ryssdal: We had a spirited conversation at our morning news meeting this morning about the Xbox and about an announcement about it today. Not about its share of Microsoft’s revenue or the latest sales of video games, but as a way to just watch TV. The game console will do what — for most of us — a set-top box does.

There was one guy around the room — our morning producer Ethan Lindsey — who understood how it works. So we dragged him into the studio to explain.

Ethan Lindsey: I don’t own a single video game. I’m not even a gamer. But I can use my Xbox to get college football games, Netflix, Hulu, HBO — basically anything you can get on a normal TV, you can get on an Xbox and you’re just not using it as an Xbox.

Ryssdal: So we got our technology reporter Steve Henn on the line to make sense of all this stuff. Hey Steve.

Steve Henn: Hey.

Ryssdal: So you heard the tape, right?

Henn: Yeah.

Ryssdal: Okay so why is Microsoft and Xbox making these changes?

Henn: Well, you know, this is their bid to get into the living room. As Ethan already discovered, he can watch ESPN, he can watch all these other channels. And Microsoft is adding HBO Go, Xfinity, Youtube, Major League Baseball. I talked to Ross Honey, the GM for Xbox entertainment and advertising division, and this is what he said:

Ross Honey: So our vision here is to aggregate as much content as possible that our users want to watch all on the Xbox.

Ryssdal: All right. But aren’t you just swapping out one box on top of your TV for another box on top of your TV?

Henn: Well, kind of. You know, and at this point Xbox can’t deliver everything. So it’s not going to scan through all of your 250 TV channels and find shows on that. But in some ways it’s even bigger than that. It could change the way you interact with your TV. So, instead of using your remote, you could use — if you have Xbox Kinect — voice commands or hand gestures. So, let’s say you want to watch a William Macy movie. You could just walk into your living room and say “Xbox, Bing William Macy.” And it will show every movie William Macy was in from “Tale on Despereaux” to “Fargo.” And it will show you three or four different ways to watch it. What’s available on Netflix, what you can get from Zune through Microsoft and other things as well. So it’s going to change how we search for television. And that actually is just the beginning. You know, Kinect has has artificial intelligence built in.

Ryssdal: Yeah, ’cause that’s all we need with our TVs.

Henn: Right. A TV that’s smarter than you. But it will be able to tell if it’s you in the living room or your kid. It could tell if you’re paying attention to the ad it’s showing you. So advertisers potentially would love this. It’s a much better way to measure whether or not an ad is effective or not.

Ryssdal: Give me a sense of scale because this sounds technically complicated and like it makes sense to 14 people in the whole universe.

Henn: Well, you know, it can’t be that complicated. I was talking to some analysts and something like 10 million people in the United States are doing it. I haven’t set one up in my living room but you hear that half of all data traveling over the Internet during prime time watching hours is Netflix streaming.

Ryssdal: Yeah.

Henn: Well, apparently half of that is actually streaming to an Xbox. So it’s already huge before they’ve added all this new content.

Ryssdal: Does that mean that the days of Scientific Atlantic set-top boxes that we all have now are soon to be gone?

Henn: Yeah, the days may be numbered. You know, the cable companies don’t really love the set-top box business. They’d like to get out of it. This might be one cheap easy way for them to do that. So stay tuned.

Ryssdal: Steve Henn. Thank you, Steve.

Henn: Sure thing.

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