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Will Gamers Stick Around For Xbox TV?

Microsoft's new original shows — like the Amazon Fire's games — aren't a reason to buy. They're a reason to stay.

Posted on April 28, 2014, at 2:50 p.m. ET

Last Thursday, at the pristine green New York pied-à-terre Microsoft keeps for the Xbox One, the two honchos of the company's fledgling original programming arm debuted footage from their docket of new shows. Given the resources of Microsoft and the years of experience and success between said bigwigs — Nancy Tellem, Microsoft's entertainment and digital media president, ran CBS Television in the aughts, and Jordan Levin, the executive vice president in said division, ran The WB during its Buffy and Dawson's Creek halcyon days — the presentation of Xbox Originals was remarkably modest. The first three programs Tellem and Levin teased, and the first three that will run, were a series of short documentaries, a reality show about street soccer, and live streaming footage of the music festival Bonnaroo. There were no major stars or household name writers or directors involved. House of Cards and True Detective, these were not.

Tellem ("We've all been through this long enough to know there are a lot of misses and some hits, and this is a long process") and Levin ("We know how tough this is and how long it will take") spoke humbly about the process of building a digital production company from scratch, for an audience the size of which is not yet clear. Hence their approach: piecemeal, data-driven, cautious. "The plan was not to turn the lights on with twelve shows," Tellem said.

So why, exactly, is Microsoft making modest television shows for an audience that already has a plethora of streaming options, many of which hold greater star power and prestige?

The answer has less to do with directly answering the splashy original programming initiatives of newcomers Amazon and Netflix, and everything to do with the larger-scale race to become the dominant electronic device in the home, a race in which Xbox, by virtue of its huge user base, has a head start.

Ultimately, Microsoft and Amazon and Roku — and every new media box maker —are competing over four to five hours of television that the average consumer watches per day, hours that are slowly trickling away from traditional cable boxes. Their challenge isn't just to entice users to buy Xbox (and it's hard to imagine anyone buying a $499 box for a run of original shows), but to monopolize those free hours in any way possible. In this context, it's clear that Xbox original programming isn't meant to compete with Netflix or HBO or Hulu shows per se — all of which are available on its native platform — but is meant as an additional means of keeping Xbox users on the Microsoft platform when they're tired of Titanfall and caught up on Game of Thrones. That's why, at least at first, the Microsoft shows will be aggressively targeted to men aged 18–34, the demographic at the heart of the massive Xbox install base.

Says Tellem, "We're looking at our subscribers and trying to give them reasons to stay on our platform."

"Reasons to stay" are a good way of thinking about the recent proliferation of multimedia box features which, taken on their own, seem modest or even lackluster. Take the gaming capabilities of the recently-announced Amazon Fire. No one would buy a Fire explicitly for its games, which are a grab-bag of ports, standards, and desultory originals. What consumers might do, though, is get their between-shows entertainment fix from a casual game.

"Amazon is aiming at those people who can't find anything they're in the mood to watch," says Forrester analyst Jim Nail. "They're saying, 'here's another option.'" The idea, as with the Microsoft shows, is to remove the reasons for a user to switch to another device.

Of course, already having that device in millions of homes helps. Amazon, Roku, Google and Apple all have to convince consumers that they need another thing under their television. As Nail says, "All Microsoft and the other consoles have to overcome is the perception that they are only a game device." Microsoft's new programs are the vanguard of the push to change that perception, and to turn Xbox from a word connoting only games to an entertainment brand signifying, broadly, exciting content for young men.

Are the shows that Tellem and Levin previewed last week there yet? No. Nothing I saw was particularly compelling or a real "reason to stay" engaged with Xbox, especially considering the streaming options currently available on other platforms. Having the technology and the user base are important and necessary, but, as has been the case with the "war to win the living room" since the outset, content (specifically, great and universally appealing content) is the one and only way to win. And that's why the deal Amazon reached with HBO to stream its content was so bracing. People will go where the best shows are, 18- to 34-year-old gaming-obsessed men included. What these shows do represent are the beginning of a commitment to creating and hosting original television. These shows aren't Netflix killers, they're a stake in the ground to remind content creators and Hollywood executives of Xbox Live's 50 million-plus users, and their success or failure will go a long way toward deciding if the people who can make can't-miss programming will bring their best material, one day, to Microsoft.

Of course, there's no guarantee that either game consoles or streaming boxes will crack the code of digital viewership. Smart TVs obviate the need for an extra device entirely. And Nail thinks a business-model solution — device makers and the big television networks figuring out a model to bring primetime television to the new boxes — is just as likely as a breakthrough hardware solution in the mass movement of consumers to streaming devices. In the meantime, the task for companies like Microsoft and Amazon is clear: getting consumers used to the idea of a single branded portal for their digital entertainment, and giving them reasons to stay.

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