Josh Roberts got his first video game system — Atari — when he was 4, and since then, “I’ve had all the latest and greatest systems,” said Mr. Roberts, 27, an advertising account executive. The roster includes various versions of Nintendo, Sega and Sony PlayStation, the original Microsoft Xbox and now its latest iteration, Xbox 360.Last year when Mr. Roberts moved with his wife from Los Angeles to Memphis, he didn’t have cable for several months.
So he began using his Xbox 360 for something more than his standard fare of games like Guitar Hero II and Madden NFL: he downloaded episodes of his beloved “South Park” as well as the occasional movie in high definition, for fees running from $2 to $6 through Xbox LIVE Marketplace, the emporium accessed through the console’s interface.
“I’ll sometimes also look and see what the top downloads are and check them out too,” he said. With the continued rise of video gaming — sales of the Xbox 360 have hit 10 million — consumers in that highly prized demographic of males from 18 to 24 are being drawn away from the entertainment provided by the small screen and the multiplex. To bring them back to the fold — and to compete with Apple’s iTunes — Microsoft and its content providers, among them Paramount Pictures, New Line, Warner Brothers, MTV, CBS, A&E and ABC are engaged in some serious outreach.“We need to find viewers wherever they are,” said Michele Gateless, the executive vice president and general manager of Comedy Central. “Some of them are firing up their Xbox rather than their cable box.
They have so many entertainment options. Being on Xbox is a perfect way for us to reach them in their own environment.”Since late last November, through the console interface and a points card available in $5 increments from chains like Best Buy, Xbox LIVE Marketplace has offered video-on-demand downloads of movies, often in high definition, and download-to-own episodes of a television show.
Microsoft declined to give revenue figures for the service but claims it has grown by double-digit figures each month since it was introduced. Membership at the basic level is free and as simple as signing up on iTunes. “We allow a consumer who’s very engaged in games to shift, with the same box, to watching ‘The Departed,’, ” said Ross Honey, senior director of the media entertainment group at Microsoft, referring to Martin Crosse’s Oscar-winning movie. Xbox LIVE Marketplace also has some exclusive content, for example, a no-cost high-definition version of a “South Park” episode and some first-look content.
Before “The Sarah Silverman Program” appeared on Comedy Central, the first episode was available free in the Marketplace. There’s a similar plan in place for “American Body Shop,” a series that begins on Comedy Central on July 8; starting yesterday, its premiere episode was available for free download to Xbox LIVE’s more than six million members. The service currently offers more than 2,000 hours of programming. To prevent piracy, consumers have 24 hours to watch rented material before it is automatically expunged from the console’s hard drive.
“The people we’ve partnered with seeing this as a good way to re-connect with the consumer,” said Mr. Honey. For example, the high-definition “South Park” episode which has, thus far, been downloaded almost 400,000 times, contained a message urging viewers to watch for the series’ new season. Warner Brothers promoted the theatrical release of the film “300” on the Marketplace interface. “We’ve seen tremendous results,” said Michele Edelman, vice president of marketing for Warner Brothers digital distribution whose offerings include current television shows like “Supernatural” and “One Tree Hill,” classic fare like “Chips” “The Dukes of Hazard,” “Scooby Doo” “Yogi Bear,” as well as movies. And some platforms encourage their own hits.
When Warner released “Beeriest” to the rental market, the gross-out comedy became the No. 1 offering on the VOD Xbox platform, according to Ms. Edelman. “It might be buried in a video store, and on Xbox it’s been able to rise to the top,” she said. The visual sophistication of gamers is such that they are largely unsatisfied by traditional television broadcasts, said James L. McQuivey, a principal analyst at Forrester Research.
“It’s very smart of Microsoft to realize, ‘we’ve got the customers, we already have an Internet connection for millions of boxes, let’s see what other visual treats we can feed them.’ ”Mr. McQuivey added, “From all the data I’ve seen behind closed doors, it does work.”What is good for Xbox’s best consumer, the young male gaming enthusiast, Mr. Honey hopes will be good for other segments of the population. The goal is to broaden the consumer base with younger offerings like Nickelodeon’s animated series “Fairly Odd Parents.”
According to Mr. Honey, Microsoft did a brisk business with a high-definition version of “Happy Feet” when a few weeks ago it was added to the offerings on the service. “We absolutely believe that ‘Happy Feet’ being available brought families to use Xbox in a way they haven’t used it before,” he said. “And when you bring them there, they start to browse around.”Indeed, Mr. Roberts of Memphis says that although his wife does not play video games at all, “the movie and TV service on ‘Live’ has her using the Xbox.
Because of the service she knows how to navigate the user interface to download the content she wants.”Anita Frazier, an industry analyst for the NPD Group, a sales and marketing research firm, says Xbox’s expansion of services makes sense.“It’s where entertainment delivery is headed. It’s a natural evolution for any of these boxes, whether it’s a computer or an Xbox or a PlayStation 3 or Apple TV to deliver a variety of content and whether it’s games or music or TV or movies.”But, she added, “a lot of it is going to hinge on the user interface and how easy it is to accomplish the downloads.”Not always so easy, according to Mr. McQuivey.
“The movie feature as currently arranged is no better than traditional video on demand. The titles are hard to find,” he said, adding, “There are operational things that need to be resolved before they can take it to the next level.”Mr. Roberts has downloaded a few high-definition movies and “it took hours,” he said. “I don’t think the broadband technology is there yet.”He also finds the Microsoft points card (80 points equals’ one dollar) an annoying and slightly confusing system. “It’s like at a carnival where you need two tickets to buy a drink and three tickets to buy a hot dog,” he said. “I’d rather know what I’m paying, and I’d like to see that transaction made in dollars rather than points.”Xbox LIVE Marketplace, he added, “is not yet at a place where I think it’s made my life easier or more entertaining in my leisure time, but I’m excited about the potential. When it moves faster and the bandwidth is great, then I think it will be very cool.”