How Microsoft Can Dominate Home Video

Microsoft

Microsoft dominates the personal computer market by controlling the vast majority of home operating systems.  One of Microsoft’s recent initiatives has been to leverage its dominance in the PC market to capture the living room.  Xbox 360 has been a knockout success in this area.  The Xbox brand, which pwns the game console market, is transforming itself from a game console to a media and entertainment device.  I believe the future of Xbox spells domination for home video.

…And that is where my Microsoft cheer leading session ends.  In the recent years, Microsoft has been slow to the game and has marketed its products with the intelligence of a big dumb animal.  Whether they acknowledge it or not, Microsoft’s business strategy has been duplication, not innovation.  Going forward, Xbox gives Microsoft the platform to become a truly respected innovator.  The next generation Xbox console offers Microsoft the opportunity to take a major share of the home video market.  Most people do not want ten different AV components in their home when they can receive all the same content from one.  Xbox needs to become a transitional platform that embraces both current and emerging technologies.

Physical Media

I am large proponent of blu-ray.  Is blu-ray here a game changer?  No, not in the same way that DVD was.  However, I question the many that argue streaming is the only way to go.  I love streaming media, but the experience is completely different from blu-ray.  In order stream a blu-ray quality video, I would need a 45Mbps Internet connection.  The domestic infrastructure does not have the bandwidth capacity required to handle streaming blu-ray quality video to scale (scale defined all US homes that currently have a broadband connection), and the problem becomes even greater home video moves from 1080P to 4K.  Furthermore, there is no incentive for ISP’s to grow capacity when there is no viable business model to generate a sufficient return.  My point being, though companies should never bet against the Internet, physical media is here to stay for the next 5 years.

Where they meet

Microsoft’s strategy should be to acknowledge that no one knows the future of distribution and use that to its advantage.  By creating a transitional platform that embraces both physical and streaming media, Xbox will become the hub of home media and entertainment.  In the process, Microsoft can gain back some of the respect it has lost and I can relinquish my title of Microsoft, The Big Dumb Animal.