The NY Times is reporting that Microsoft is trying to expand the entertainment value of it’s Xbox 360 console by offering streaming media such as live sporting events and movies. Microsoft is currently in negotiations with the Walt Disney Company (parent company of ABC & ESPN) to provide a per-subscriber fee for live sporting event streams similar to the ESPN 360 service offered to broadband users. Xbox Live users can already (for a monthly fee) get NetFlix movies streaming through their Xbox 360, but the move into television is significant.

People are saying that 2010 is the year to ditch your cable service, which is ironic since there is a guy in my living room fixing my cable box as I write this. This could very well be true, with the emergence of free streaming TV websites such as Hulu.com I am hearing more and more about people canceling their cable subscriptions. The fact that ESPN is willing to provide live streaming coverage is significant, because the downside to sites such as Hulu is that they are not allowed to post the content until it has finished playing on the regular broadcast stations. If ESPN is providing truly live sports events, it is no different than if you had a cable subscription for the same thing. This should start to worry the major cable providers (Time Warner Cable, Cox Communications, etc).

Since you would still need to pay some sort of fee to get this service, it isn’t a free ride. The significant part of this story is that individual stations could start to negotiate directly with consumers rather than cable providers, cutting out the middle man. This could drastically cut down the price of programming while also pushing many of these large companies out of business.

The deal with ESPN is not set in stone yet, and both parties are refusing comment on the ongoing negotiations. This represents the future of the major gaming systems, they will become entertainment systems as well. I use my PS3 just as often to listen to Pandora or watch Blu-Ray movies as I do to play games, and now I can also watch BBC News broadcasts, streaming movies through NetFlix, and if this deal goes through I would assume ESPN and other providers will be knocking on Sony’s door soon as well.

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