Microsoft developing paid TV service?

Microsoft has reportedly entered into talks with media companies like Disney and HBO to offer a pay television service through its device platform, including the XBox 360, but possibly extending to other devices like Windows 7 PCs and even Windows Phone 7 devices. Although no official comments or announcements have been made, Reuters reports that Microsoft has put several options on the table, including enabling customers to pick what premium television channels they want in an a la carte manner—something cable customers have been demanding for years, but have never received. But TV fans shouldn’t hold their breath: the service, if it materializes, could be as much a a year away.

Microsoft has previously edged into the television business: years ago, it stepped into the Internet-enabled TV marketplace when it acquired WebTV, and it has also developed MSN TV set-top box systems. Although efforts like Google TV have so far met with a cold shoulder from traditional broadcasters—which are largely denying access to the devices—cable operators might see paid subscriptions through something like Xbox Live as a way to defray losses from subscribers dropping their cable packages in favor of online streaming services from the likes of Netflix, Apple, and Hulu.

According to Reuters, two sources have indicated Microsoft has put three basic options on the table. In one, Microsoft would act as a “virtual cable operator,” offering premium cable channel programming over the Internet for a monthly fee. In another, Microsoft would offer premium content (like HBO, Showtime, and ESPN) on an a la carte basis for a monthly fee, enabling subscribers to select just the premium channels they want, without being forced to subscribe to content they don’t want to receive. In a third scenario, Microsoft would authenticate users as valid cable television subscribers, and make the subscribers’ cable offering available to them via the Internet.

Other reports have Microsoft working on new interfaces to search, manage, and navigate television content, making it easier for users to find the content they want without having to worry about which source is providing it. Microsoft, of course, is also keen to integrated social media and interactive content with television.

Microsoft says it does not comment on speculation, and had no comment about a possible television service.