A new report from research consultancy TDG predicts that console-affiliated media portals such as Microsoft’s Xbox LIVE and Sony’s PlayStation Network will soon become formidable competitors to incumbent PayTV services. Leveraging broadband-enabled game consoles as Over-the-Top video platforms – thus bypassing cable and satellite TV operators – these companies will offer a compelling alternative to traditional TV programming by providing a more immersive, interactive video experience.

"Today’s launch of Microsoft’s Experience and the Xbox LIVE Netflix streaming video service is a perfect example of how potent these services will soon become," notes Michael Greeson, president of TDG and co-author of the new report. "There is little doubt these services are finally ready for primetime."

TDG points to several facts which portend of how powerful these offerings will be:

• Even before today’s launch of Experience, Microsoft’s Xbox LIVE had amassed some 15,000 movies (1,000 of which are HD) and some 13,000 TV shows for download-to-own. Xbox LIVE was the first online video portal to offer HD downloads for TV viewing
• The Netflix partnership adds 12,000 movies and TV programs to the mix, all for free streaming to Netflix subscribers. This enables Xbox 360 users to access on-demand movies and TV shows within the Xbox Experience social environment with a click of their remote.
• Sony’s PlayStation Network has collected close to 1,000 movies and hundreds of TV programs for download-to-own. As well, it has announced plans to expand dramatically its video library in the next few months in order to compete with Xbox LIVE.
• Sony’s CEO Howard Stringer noted, "Sony’s unique position in electronics and entertainment will enable us to provide specialized offerings for Sony customers directly to their televisions outside conventional distributors and without the need for any set-top box." (TDG’s emphasis)
• Even Nintendo, staunchly dedicated to pure gaming experiences, is working with Fujisoft to introduce ’Everybody’s Theater Channel’ to Japanese Wii users in December 2008.

Perhaps it’s the end of pay-per-view TV services and perhaps not. Digital cable definitely has more to offer and satellite has never been an outstanding service due to numerous reasons. But we all need that broadband connection for our game consoles so I don’t think it’s the death of the cable companies just yet...But it might cut into their profit margins if the prices are right. Pay-per-view movies could be the way of the past with downloaded content on the game console being the future.