New Zune-branded video streaming subscription coming to Xbox LIVE?

Xbox LIVE is no stranger to video content, offering a range of options to enjoy movies and TV, including third-party content via the likes of Netflix; partnerships with cable and satellite TV companies such as AT&T’s U-Verse in the US, and Sky Player in the UK; and of course, the ability to stream from other devices through Windows Media Center Extender capabilities.

Microsoft also provides video content to Xbox LIVE through its Zune Video Marketplace, allowing users to rent or purchase individual videos on demand.  A report from The Daily suggests that Microsoft is now gearing up to significantly enhance its video services through Xbox LIVE with a new Zune-branded video subscription service in an attempt to capitalize on the success enjoyed by other content providers, such as Hulu and Netflix, on the gaming platform.

It’s been known since early last year that Microsoft intended to consolidate its Xbox LIVE video offering into a more streamlined and user-friendly Video Marketplace - a move which actually began with the introduction of Zune Video to Xbox LIVE in 2009, but which hasn't significantly changed or improved since then, although the new Xbox dashboard and UI previewed at E3 at last signals some welcome changes to how this content might be better presented to users. 

Last month, rumours were swirling about a new ‘Xbox LIVE Diamond’ package that includes a subscription TV service, and although that service was not announced at E3 as many had expected, it appears that such a service could still appear in some form later this year. Indeed, WinRumors is still expecting a Diamond package to appear, featuring subscription access to TV, video and music services. Microsoft already offers subscription-based music access through Zune Pass, and an expansion of this offering to incorporate video content certainly sounds like a credible move given what is known about Microsoft’s plans for turning Xbox into a brand with a broader focus on entertainment as a whole, rather than purely a gaming experience.  

The new video service is also expected to include elements from ‘Ventura’, a Microsoft development project aimed at improving and enhancing discoverability of video and music content across multiple devices, and will likely be integrated with the new Live TV and Bing Search features that were officially announced for Xbox LIVE at E3.

However, The Daily’s report certainly contradicts many other reports in recent months that suggest the Zune brand is due to be retired soon, with its music and video services being folded into the Xbox brand instead.  But regardless of how these services might be branded, the prospect of a more intuitive and integrated TV, music, and video service from Microsoft – potentially extending across Xbox consoles, Windows Phone 7 devices and even onto PCs and tablets through Xbox LIVE integration in Windows 8 – is a very exciting one indeed.  

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