SYDNEY, 3 JUNE 2009 - The world's largest software maker yesterday announced it would enter the Australian video-on-demand market by the end of the year, making good on a long-time threat to use its Xbox 360 to pump films into the nation's living rooms.
The company unveiled the push at the Electronic Entertainment Expo (E3) in California as it capitalises on content distribution deals with a host of big-name studios including Universal Pictures, Paramount, Warner Bros and 20th Century Fox.
But Microsoft Australia remained tight-lipped on anticipated pricing for the service, which it expects to make available to Xbox 360 owners connected to its Xbox Live network from the end of the year.
"We deal directly with the studios, and I believe at the moment we have every studio signed up bar Sony," Xbox Australia product marketing manager Jeremy Hinton said. "We've not set local pricing yet but it will be a rental model."
Once the service is available, Xbox Live subscribers will have access to such titles as Terminator: Salvation, the Harry Potter series, Wolverine, State of Play and Frost/Nixon.
Sony Pictures' extensive catalogue remains off limits.
Sony Computer Entertainment Australia is working to develop similar content deals for its competing PlayStation Network, which connects to PlayStation 3 consoles.
Microsoft has sold more than 630,000 Xbox 360 consoles in Australia and about 54 per cent of those are connected to Xbox Live.
Mr Hinton said Microsoft would offer movies of Blu-ray quality that consumers could either download to their Xbox hard drive or stream over the internet. The service will enable users to watch internet movies on their TV rather than a personal computer.
Downloaded movies would expire after seven days while streaming movie viewers would have 24 hours to watch a film, although Mr Hinton added that the quality of streamed films would depend on the speed of a viewer's internet connection.
Video Ezy managing director Paul Uniacke said the entry of Microsoft into the home video market was unlikely to cause too many waves for video stores.
But he said the online movie market was still nascent and he welcomed any activity that would help raise the profile of internet-based services, such as Video Ezy's movie download products and its Blockbuster channel on TiVo.
"The more activity we get in this marketplace, the larger and the faster the market will grow," Mr Uniacke said.
Microsoft also said yesterday it would make some Sky television channels available to UK Xbox Live subscribers, but Mr Hinton could not say when the company might launch a similar service in Australia.
