Microsoft is reportedly considering a Smart TV platform of its own, with sources claiming that the software giant has been negotiating with TV networks for an online, subscription-based service that could work through the Xbox 360. According to Reuter's two sources, Microsoft is evaluating setting up as a "virtual cable operator" with web delivery, or alternatively using the Xbox to "authenticate existing cable subscribers to watch shows with enhanced interactivity," perhaps offering interactive adverts or extras.
Another alternative under consideration is offering individual channels - such as HBO or Showtime - for online rental, likely viewed as part of Xbox Live. While rival platforms such as Google TV and Apple TV have struggled to different degrees with content deals, one of the sources claims Microsoft's talks have been more successful. "We think the more competition the better, we will price and package it in such a way that we still make the dual revenue stream," one suggested, going on to predict that networks "could probably charge more for interactive advertising."
Early demonstrations of the technology have supposedly incorporated social media, interactive advertising and motion control technology, using Microsoft's Kinect peripheral. However any commercial service isn't expected to arrive for around 12 months; the company has had its fingers burnt before with smart TV platforms - such as MSN TV - and is unlikely to want to make the same mistakes again.