Xbox Live tries ads with McDonald's, New Line partnership
Free sponsored content aimed at attracting new download customers
By Jennifer Netherby -- Video Business, 6/22/2007
JUNE 22 | Microsoft Xbox Live is partnering with McDonald's and New Line Home Entertainment to offer its first advertiser-sponsored movie, which will be available free to subscribers over two separate one-week periods.
New Line's Austin Powers is available on Xbox Live as a free ad-sponsored download.
Beginning today, users can download a rental of Austin Powers through the Xbox Live Marketplace. The download will be available through June 28 and again from July 13-19.
Xbox is in talks to do more sponsored downloads as it expands its advertising push on the service, said senior director of media and entertainment Ross Honey. On the game side, T-Mobile is sponsoring free demos of new games, which users can try out before buying.
For the Austin Powers offer, Xbox Live features a McDonald's branded area dubbed BurgerCon, where users can download the film or enter a play and win contest.
Honey said Microsoft sees the sponsorship model as both a way to bring in advertising dollars and get users who haven’t downloaded videos on the service to try it out.
The company didn’t divulge download numbers but said one-third of all Xbox Live users in the U.S. have downloaded a movie through the service. Users access Xbox Live with their Xbox 360 console, which already connects to the TV, an advantage the site has over competitors that are still working on bridges between the PC and the TV.
“From what we have seen, connecting to the TV makes all the difference,” Honey said.
The service offers permanent downloads of TV shows from such partners as Comedy Central and CBS the day after they air. Films from Warner Home Video, Paramount Home Entertainment and Lionsgate are available as a download rental.
At the same time, Xbox continues to add more TV and movie content to its site and as part of that has begun a push sales of short-form videos. As users pay with Xbox points that they purchase in advance, Honey said the site can charge small amounts for shorts because they don’t have to worry about minimums often required for credit card transactions.
So far, users have shown they’re willing to pay for shorts. Animated short The Adventures of Tek Jansen from Comedy Central’s The Colbert Report, available for about 50¢, was the No. 2 TV download based on revenue following its mid-April debut, Honey said. It outsold downloads of The Colbert Report and The Daily Show With Jon Stewart.
Microsoft also is offering anime shorts from Atom Films and CBS short series Clark and Michael, with Michael Cera of Arrested Development.
Xbox also is pushing high-definition movie and TV downloads. Warner is offering all DVD premieres and some new releases and catalog films in high-def on the site.
Xbox also runs a tag after the movie noting whether it’s available on HD DVD, though it doesn’t mention Blu-ray Disc. (Microsoft is a supporter of HD DVD and sells an HD DVD add-on drive for its Xbox 360.)
Lionsgate and Paramount also offer select new releases and catalog films in high-def.
Honey said high-def downloads account for 47% of revenue from movie and TV downloads available in both standard and high-def.
