Ballmer teases Xbox TV, but Microsoft lacks programming deals

Microsoft (Nasdaq: MSFT) CEO Steve Ballmer teased the new Xbox TV service, which will allow viewers with the gaming console to watch live TV programming. But it's not clear which cable networks will be distributed through Xbox TV, or if the content will only be available to authenticated cable and satellite subscribers.

Steve Ballmer, Microsoft BUILD

Ballmer speaks at Microsoft's BUILD conference earlier this week.

Microsoft is looking to differentiate itself by supplying Xbox owners with an advanced programming guide that would incorporate Web video content from Netflix (Nasdaq: NFLX) and other suppliers, in addition to live TV. And while the company will also use its Kinect technology to let viewers use hand gestures and voice commands to navigate content, the demo Microsoft ran during Ballmer's presentation at a conference on Wednesday failed when the company attempted to run a voice-based search to find episodes of hit NBC comedy The Office.

"It's a good thing that's shipping for Christmas," Ballmer said after the demo failed.

Microsoft could shake up the pay TV sector if it were able to strike licensing deals with major programmers such as Walt Disney Co. (NYSE: DIS) or Viacom (NYSE: VIA) which would allow it to stream ESPN, MTV and other live cable channels to any Xbox owner, regardless of whether they are also a cable or satellite customer. But in the near term, it's doubtful that major cable networks would allow Microsoft or Apple (Nasdaq: AAPL) or another virtual cable operator to carry their networks because of terms of their licensing deals with cable and satellite providers that limit the amount of content that can be distributed online.

For more:
- The Chicago Tribune has this story
- Light Reading Cable has this story

Related articles:
Microsoft licenses Jinni recommendation engine
Microsoft, Apple ready to take another run at cable
Microsoft's knocking on TV's door again