Rumor Mill: TV Networks Coming to the Xbox 360

Sources within the industry have suggested that Microsoft might be in early talks to get television networks to deliver content on the Xbox 360 home console through a subscription based service, with the launch date set for late 2011.

The two sources are saying that Microsoft is talking about creating a “virtual cable operator” that will deliver television programs to those who are willing to pay a monthly subscription to Microsoft, with the revenue shared with those companies who are providing the actual content.

Microsoft is also offering the options of making the Xbox 360 an alternative way of watching television shows for those who have already paid for subscription to networks that use an HBO-like business model.

The company is also interested in offering archives for content providers like HBO and Showtime, which have historically created high quality programming that can be interesting to Xbox 360 users even years after it was originally aired.

At the moment, those who subscribe to Xbox Live Gold can get access to the ESPN channel from Disney and Microsoft must believe that more people will be attracted to its home console if it expanded the range of experience that can be obtained through it.

Microsoft has not commented on the rumors, but if a deal goes through, we might see an announcement at the E3 trade conference in June 2011, with a launch date of late 2011.

Such a deal would also be interesting to content providers, who are increasingly worried that viewers, who are getting accustomed to a more digital world, are no longer prepared to pay, in both money and time, for the traditional channel experience while being open to paying for the ability to view their favorite programs through any platform and at any time.

The Netflix streaming service has already proven to be a hit on home gaming consoles.