Last year stories started circulating about a Microsoft plan to integrate pay TV into Xbox Live. Reports claimed they were close to finalizing deals with companies including Time Warner, the BBC, and HBO.
However, it now appears they weren’t as close as originally reported and their plans have been put on hold indefinitely. It seems TV executives weren’t impressed enough to offer terms acceptable to Microsoft, and the deal fizzled.
Citing an unnamed media executive personally involved in the negotiations, Reuters says Microsoft got so far as demonstrating their TV platform in action, but ultimately decided the price of programming was too high. Their source reportedly said, “They built Microsoft TV, they demoed it for us, they asked for rate cards but then said ‘ooh ah, that’s expensive.”
Combining this new information with previous reports about Microsoft TV, it appears their plan was to provide both Netflix-style video on demand, but with more current content, and a traditional (but web-based) pay TV service. In addition, they seemed to be considering producing exclusive content of their own.
Of course this is nothing new or shocking. Like so many other industries built around legacy technology, they have fought nearly every attempt to develop new business models.
Network executives have licensed TV series to Netflix with key episodes missing, demanded Hulu block viewers who chose to watch their free shows (and commercials) on TVs instead of computer monitors. On the other side of the equation, cable providers are punished if they help paying customers extend TV service beyond the living room.
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Result for: negotiations
Microsoft is on the verge of purchasing Internet phone company Skype for over $7 billion, in what would be the company’s largest ever acquisition.
Negotiations are in the final stages but the deal could still fall apart, say multiple sources speaking to WSJ.
Skype has 663 million users globally and says 207 billion minutes of voice and video calls were made over the service in 2010.
In 2007, Microsoft overpaid for online advertising firm aQuantive, paying $6 billion in what is their current largest deal, ever. In 2008, Microsoft offered $48 billion for Yahoo but was turned down and eventually the deal collapsed. Yahoo is valued at $25 billion today so it certainly appears that Microsoft dodged a bullet.
The Skype deal will be very expensive given the company’s history of no profits.
In 2010, Skype had nice revenue of $860 million but lost $7 million. Google and Facebook were reported as being interested in the VoIP company, as well.
Result for: negotiations
News Corp. returned their Fox signal to Cablevision subscribers last night, just in time to watch Game 3 of the World Series.
Both companies have agreed “in principle” on a new deal over retransmission fees, and Cablevision subscribers now have their Fox, Fox Deportes, NatGeo Wild and My 9 channels back.
The signals had been blacked out since October 16th, when negotiations between the companies hit a wall.
News Corp. was asking for $150 million in retransmission fees, more than Cablevision pays for ABC, NBC and CBS combined.
Terms of the new deal were not disclosed.
