Reuters is reporting that Microsoft is developing a cable TV service as part of it's extra-gaming services available on the Xbox 360.
This has yet to be officially confirmed or announced because the service will not be ready for at least a year. Microsoft has begun briefing some members of the media about the upcoming “virtual cable operator” service. The plan will offer premium channels like HBO and Showtime a la carte, as opposed to part of larger TV packages currently offered by cable providers.
This development is not surprising after the success of streaming content services such as Hulu and Netflix. It is also a smart addition with Xbox now offers ESPN programming (if you have access/pay for ESPN 3). UK 360 owners have been watching live television thanks to Sky Player for a while now. Hulu Plus is now available for PlayStation 3 and is expected to arrive on the 360 early next year.
The Xbox can definitely handle this type of service but are 360 owners willing to pay an additional subscription fee on top of Xbox Live, Netflix, and Hulu Plus. If that service fee comes in less than a cable provider, I am willing to bet that they are. The main deciding factors are the pricing an package offerings. Would you be interested in a fee-based cable TV service on your Xbox? How much would you be willing to pay?