Microsoft's (MSFT) Xbox Entertainment Studios took the wrap off its plans for original programming Monday, announcing a lineup that stretches from soccer to Sarah Silverman.
With everyone from Amazon (AMZN) to Netflix (NFLX) launching new premium content, Microsoft is hoping Xbox's distribution network, along with its interactive features, will give it a competitive advantage.
"There are a lot of gamers who are used to actually interacting with the content itself, and what we're doing is creating high quality, premium content, and then hoping that we also can take advantage of the tech that we already have, with the over 200 engineers in Vancouver, Los Angeles, and Redmond, to create interactive features that offer a new TV experiences," said Nancy Tellem, Microsoft's president of entertainment and a former president of CBS Television Studios.
Microsoft has 12 originals in the works and is leaning into its base -- millennial males -- who spend more hours streaming content than they do gaming on the Xbox. In June, the studio kicks off with "Every Street United," a street soccer documentary series featuring international soccer star Thierry Henry and launching ahead of the World Cup in Brazil. Tellem hopes Xbox's massive distribution network -- Xbox has 48 million subscribers worldwide -- makes the world's biggest sporting event a likely score for the software giant's first foray into premium content.
"The most important thing is really creating this social community. So obviously with the use of Skype, you can actually, in your own living room, connect with people on the other side of the United States or the world for that matter, and be able to speak and exchange actually real-time conversations while you're watching the show," Tellem said.
Also in the works, a much talked about "Halo" live action TV series based on Microsoft's popular gaming franchise, produced by Steven Spielberg in partnership with 343 Industries and Amblin Television. The show goes into production in November. It's one example of how the company plans to leverage its substantial intellectual property developed for Xbox games into video.
In addition to originals, Microsoft is diving into live streaming, starting with the Bonnaroo music festival in June.
"It essentially creates a virtual festival in your own living room," Tellem said. She noted that fans will be able to flip between different stages and camera angles, go backstage and follow individual artists, all while Skyping with friends to watch remotely together. "The new audience likes the complexity -- and the exciting thing is we have a platform that can allow us to tell more complex stories and the audience can dig in as much as they want to."
But Wedbush Securities analyst Michael Pachter says Microsoft has a unique challenge in the media market. "I don't think Microsoft is in a rivalry with Hulu or Netflix. It's more that Microsoft has a service that has a completely different value proposition -- it wants Xbox Live members to feel good about subscribing," he said. "They're not going to win Netflix customers and have them switch over to Xbox Live. But if 3 percent to 5 percent of Microsoft subscribers like any given show they produce, that makes the service stickier; and for some people that's a great deal."
It remains to be seen whether it will be enough to launch a successful studio in the face of such formidable competition.
"I will give them credit -- they hired Nancy Tellem," Pachter said, noting that Tellem is "a pretty capable TV executive" whose hire is reminiscent of when Netflix hired Ted Sarandos. "They have their respective professionals, and I expect they're going to do the right thing."
Other shows on Microsoft's roster include a six-film documentary series called "Signal to Noise/Atari Game Over"; a drama co-produced with U.K. broadcaster Channel 4 called "Humans"; a detective thriller based on New York Times bestseller "Gun Machine," by Warren Ellis; a show hosted by comedian Sarah Silverman; a stop-motion show executive produced by Seth Green called "Extraordinary Believers"; and "Winterworld," a live-action series based on a graphic novel.