Microsoft now realizes that participating in the TV game isn’t its thing.
In the middle of some 18,000 worth of layoffs for the company comes the news that Xbox Entertainment Studios, headed by long-time CBS president Nancy Tellem, will be dissolved. Tellem came on board in 2012 looking to produce bigger theme series for Xbox and other digital platforms.
As recently as May, Microsoft had touted new original digital programming to advertisers and marketers at the Newfronts in New York.
Recently hired senior TV executive Jordan Levin will depart Microsoft as well.
Many would say Microsoft’s backtracking is an isolated case in an otherwise expanding world of digital video, that the downsizing resulted from Microsoft’s Nokia acquisition where layoffs were anticipated. That said, Microsoft has previously had uneven moments in creating content for TV, digital and other platforms.
Way back n the mid-‘90s, Microsoft linked up with NBC to tag its name to the now-established news service MSNBC. But NBC always ran the show when it came to editorial. Microsoft’s equity stake in MSNBC’s cable channel ended in 2005, and its web site share in 2012.
The recent Newfront presentations featured scores of old and new media companies saying they would launch lots of video content. They included traditional print magazine groups like Conde Nast looking to pump out video content and series for their own platforms and possibly elsewhere.
Unlike Microsoft, other technology companies -- like Apple -- have continued to shy away from creating entertainment. They choose to leave the sometimes funky creative and financial functions to those with better skills -- and stomachs -- for handling the processes.
Individual and unaffiliated user-generated video still exists -- creatively. Consumption will be a different story going forward, according to analysts. Even then, the scaling of user-generated video will remain a difficult monetization formula for marketers.
That said, companies like Maker Studios, the big YouTube network group which culls thousands of channels of short-video content, is thriving -- so much so that Walt Disney Co. paid $500 million for the company.
Getting into the TV content game still remains a tricky business that can easily put a company into the black -- or quickly fade to black.