Microsoft (NASDAQ: MSFT) may make another assault on the home television market. It has visited that sector before and was beaten back by cable companies and digital video recorders.
Reuters reports that the world’s largest software company wants to compete not only with cable but with Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX), Amazon.com (NASDAQ: AMZN), and the dozens of other companies which have begun to fight to put software in TVs and new set-top boxes on top of them.
The latest move to get Microsoft into America’s living rooms will use the Xbox game console to deliver premium programs. Reuters says “The service would charge a monthly fee for access through the Xbox to networks such as ABC, NBC, Fox, CBS, ESPN or CNN, according to two sources familiar with the plans.”
Microsoft flings more mud against the wall each year as it attempts to create a market for its consumer products. It has already been nearly forced out of the multimedia player and cellphone industries, and its new Windows Mobile 7 smartphone OS for smartphones is off to a poor start.
Microsoft will make another blunder if it pursues its TV plan.
Microsoft has relied on its nearly universally recognized brand to enter both consumer and enterprise markets. The business marketplace has not been quick to adopt Microsoft’s virtualization and cloud computing software which are both critical to its enterprise plans. Companies such as Oracle (NASDAQ: ORCL), salesforce.com (NYSE: CRM) and SAP have effectively boxed Redmond out.
Microsoft faces another set of challenges in the home hardware business. It is extremely late to a crowded market. It has nothing new to offer. It wants to use a pre-existing piece of hardware–the Xbox. But, the Xbox is bought by consumers as a game console. There is little reason to expect that Microsoft can get consumers to use it, in any great number, for something else.
Google has made a crafty and smart set of decisions that Microsoft has not. When the world’s search engine leader sees a market blocked by competition, it simply buys one of the competitors. Microsoft wants to build products no one will want instead of using its $40 billion in cash to enter markets with technology which has already been successful.
Douglas A. McIntyre