Why Microsoft’s Xbox One Won’t Kick the Cable Guy Out of Your House
Like everyone else, Microsoft wants to control your living room.
The problem with that plan: The cable guy already controls your living room. He’s not leaving anytime soon.
So, despite what you may have read yesterday, the new Xbox One isn’t TV’s future, today.
If you squint at it, you can imagine that Xbox One can help Microsoft dislodge the cable guy one day. But, for now, Microsoft is simply trying to take up a little more space. More precisely: Its box won’t let you watch live TV unless you have a pay TV subscription.
This shouldn’t be a surprise, as Microsoft has already signaled for some time that it wants to work with the pay TV guys, not boot them out.
Its previous forays into moving TV to the Xbox, via deals with programmers like ESPN and HBO, have only worked for customers who already had pay TV. And while Microsoft has previously mulled creating its own TV service, it has shelved the idea, and insists that it doesn’t want to build a pay TV competitor.
Related: With the exception of Intel, every big outsider that has approached the TV Industrial Complex has reached the same conclusion. Which is why Google Fiber TV looks just like regular cable TV, and why Apple TV has yet to do much more than play Netflix and iTunes.
And Microsoft will be literally tied to cable. In order to get the TV part of Xbox One to work, you’ll end up plugging it into your existing cable box, and performing what the industry calls an “HDMI pass-through.”
[CORRECTION: An earlier version of this story incorrectly reported that Xbox One owners would need an additional piece of hardware to connect their machines with their set-top boxes.]
In essence, Xbox One is acting as a sort of custom remote for your cable box, which will let you change the channel; it is also creating its own programming guide so you can see what’s on TV.
But note that Xbox One won’t give you full control of the set-top box — you won’t have access to the DVR your cable company provides, or any video-on-demand features they offer. If you want to do any of that, you’ll have to switch inputs, and go back to the cable guy’s system.
[UPDATE: As All Things D reader "Taz" notes, Comcast, the country's biggest pay TV company, already provides Xbox 360 users to their video on demand service via an app, and suggests that the company could do the same with the Xbox One. That's true, but so far the two companies don't have an agreement in place.]
And beyond the technical arrangements, Microsoft is being as explicit as it can about the goodwill it has toward the cable guys. While the company’s marketing says its box can do everything, Microsoft’s official communications and fine print make it clear that it can’t do squat — TV-wise — without the TV Industrial Complex.
“Information that appears in the OneGuide has been created and licensed by Xbox, and works in conjunction with video services that consumers subscribe to from cable and satellite companies. We value our partnerships with MVPDs (pay TV operators), and our vision is for Xbox One to work in tandem with MVPDs’ services and offer a unique and interactive experience on top of your favorite entertainment.”
Got that? “In conjunction” … “in tandem” … “on top of.” Pretty clear.
What is interesting is that, as far as I can tell, Microsoft hasn’t gotten the explicit blessing from all of the pay TV services to launch the Xbox One. It seems to have told some, but not all, of the TV guys about it in advance, but in any case doesn’t think it needs their permission.
In an interview with my colleague Eric Johnson on Tuesday, Microsoft entertainment boss Yusuf Mehdi said Microsoft would be reaching out to the TV guys to get additional features, like DVR recording and playback. And if Microsoft continues with that kind of tight partnership, then the cable guys won’t be leaving your house for a long time.
That said, if Xbox One really does become the primary way you watch video programming — not just live TV but video, period — then it’s possible to imagine a scenario where Microsoft, with an improved bargaining position, starts trying to push the cable guys closer to the door.
Don’t count on it happening any time soon, though. Those dudes are hard to move.