Wednesday, January 11, 2012 at 1:09 pm.

Microsoft hits pause on web TV service because shows cost too much

Yinka Adegoke, reporting for Reuters:

“They built Microsoft TV, they demoed it for us, they asked for rate cards but then said ‘ooh ah, that’s expensive,’” said one senior media executive who had been involved in the talks.

That’s one thing that I think a lot of people are missing about online TV services: They’re not necessarily going to be cheap.

There’s no doubt that the web technically allows for new and interesting ways to distribute TV. And it makes sense that one option would be to get fewer channels and shows than a typical cable subscription allows today, for less money.

But the few giant companies that control the good shows aren’t going to want less money for their content just because it’s online. So then it becomes a fairly complicated equation: How much are you willing to spend for how much content, and what’s included in those bundles?

Also: Here’s the trouble with “Apps as TV channels”