Here's a video showing the IPTV service running on the 360.
My thoughts. Microsoft has been extremely active in the IPTV market for a couple of years now and has been trying to secure deals for a while. They provide the server software on the provider end, and now they're completing the chain with the 360. I think it's becoming a lot clearer how Microsoft intends to position itself now going into the long term.
People that follow this kind of CES information, always here about "the battle for the living room" or "the battle to be the box under your tv". Well in Microsoft's case, they have (or had) some boxes that would compete with themselves. You'd have the Home Theatre PCs, you'd have the whole WebTV thing, and maybe one or two that I'm forgetting, that are obviously not worth remembering.
Now with the 360, Microsoft has realized that a games console is the best box to have underneath your tv. Essentially, the 360 is going to be Microsoft's set top box that goes under your tv. What's cool is that Microsoft has created the 360 as a platform unto itself that is very organic and can grow and modify as needed for each particular user. If you want high-def content, now you have 3 different ways to watch it, all on the same box.
Compare this with Apple's iTV. It's unclear whether or not it's going to contain some kind of disc media, or if it's for purely streaming purposes. If it's a disc media, then is it going to be Blu-Ray or HD-DVD? Most likely it'll be Blu-Ray, but for the rumoured $300 price tag, I highly doubt the iTV will be able to play BR movies. That leaves it solely with the streaming option. Ok, fine. But now you HAVE to have a PC if you want to watch tv. And you're limited to streaming content. Furthermore, it's unclear whether you'll be able to watch normal tv at all, or if it's just going to be all downloaded stuff. All of this for $300.
Now for $300, you can pick up a core 360 that lets you play all 360 games. Can hook up to your computer, and this fall will act as a gateway for IPTV. So you won't even need a computer to watch normal broadcast television.
It's obvious that the IPTV client software is something that was developed for STBs in general, and they simply ported the application to the 360's platform. I wonder what other software MS plans to bring over to the 360.
So that I don't sound like a total gushing fanboy I'm trying to think of downsides to this whole thing. Well, the super obvious one is the absolute absense of DVR capabilities due to the 360's puny hard drive. I mean, the 360 CAN act as a DVR which is darn cool, but you won't be able to use it for anything worthwhile since the hard drive will fill up after 2 episodes. Again, the solution is network storage! They better announce that quickly. Secondly, is that the availability of the service is going to be very limited for the next couple of years I imagine. I'd hope this kind of service becomes available in Canada, but I'm not holding my breath for it happening in 2007. Although Sympatico was having a promotion where they were giving away a free 360 with a subscription to Internet service I believe. So that could be an indication that they plan on supporting IPTV eventually... or it could just be a normal promotion.
The other downside is that I don't think it's going to work as advertised. Sure the demo looks pretty spiffy, but we'll see what happens when it's actually working in reality. I predict lag, connection issues, and other annoyances will pop up and won't be polished up for another year until after the service launches.
Also, I found it pretty funny about how the best example the guy could give for the coolness of IPTV was for PIP services. Ooooh, I can have PIP, just like every decent TV that has been released for the past 10 years! No no, but this time you can have SIX streams going at once! Give me a break. Who the hell can watch 6 different stations at once? Nobody! It's useless. That's not to say that there aren't any cool things you can do with IPTV, it's just that the lack of vision, or his willingness to share any vision was pretty ridiculous. Once you go the complete digital route and make things powered by software, you have SO much flexibility to do a lot of really cool things. Just look at TIVO to see some of the possibilities, such as recommendations and that kind of thing. Then there's the whole community aspect. Because it's running over IP and through software, it's extremely easy for the box to communicate BACK with the service provider. So people could start doing all kinds of social networking such as tagging shows, deep tagging specific content inside of shows, cutting and sharing their own clips. And those are just some lame things I came up with off the top of my head.
As an aside. After using the Wii Opera browser at my friend's place, I have to say that a web browser on the 360 would be an excellent feature. Being able to stream YouTube and everything is just so damn sweet. I was very very very impressed by how well it worked with the Wii. And considering both the PS3 and Wii have web browsers, MS is definitely the lone one that doesn't, and therefore SHOULD.. and most likely WILL in the not so distant future. March dashboard update is my guess!