Microsoft Pacts with NBC on Streaming Olympics Coverage

Along with visions of the tech future described Sunday by Microsoft Chairman Bill Gates in his final Consumer Electronics Show (CES) keynote were several deals with the potential to bring Microsoft an influx of online advertising dollars.

One, an arrangement supportive of what’ s been described as the world’s first “long-tail Olympics,” involves a deal between Microsoft and NBC Universal. Gates said the companies have paired to bring online viewers live and on-demand content from the 2008 games in Beijing.

Also unveiled was an agreement between Microsoft and the Disney-ABC Television Group that will give Xbox Live users access to some TV shows and movies from the ABC Television Network, ABC Family, ABC News, Disney Channel, Toon Disney and MGM.

Additionally, Microsoft is joining with British Telecom to deliver high-def gaming, television and movies to BT’s broadband customers who own Xbox 360s. This service will be powered by the Microsoft Mediaroom Internet Protocol TV (IPTV) platform.

Gates told those gathered for the keynote that the Olympics coverage deal between MSN and NBC Universal will make available, live and on demand, about 3,600 hours of Olympics events. MSN.com users will be able to “customize” so they watch only the events they want and be alerted about “different things taking place,” said Gates. Additionally, the deal will help demonstrate Microsoft’s new Silverlight technology, a cross-browser, cross-platform plug-in for delivering high-quality online video.

“This type of live event programming is something MSN has gotten very good at with events like Live Earth,” he said. “And so it’s going to let us illustrate why TV is going to be very different. Events like this in the broadcast format just aren’t as satisfying, not as great as we’ll be able to make the Olympics.”

Microsoft is serious about gaining ground in the online advertising world, as evidenced by the $6 billion it spent to buy ad technology and services firm aQuaintive. The Olympics deal is likely to help MSN cash in on the expected Olympics ad spending spree.

Microsoft’s public relations agency directed all inquiries about advertising to NBC Universal, which did not reply immediately to requests for comment.

NBC Universal was involved in another deal, announced Monday, in which its CNBC will share content with The New York Times. This could be an answer to Rupert Murdoch’s News Corporation’s purchase of Wall Street Journal publisher Dow Jones & Co. and its creation of CNBC competitor Fox Business Network.

In another deal with NBC Universal, announced last month, Microsoft agreed to provide technology and sell ad inventory on CNBC.com. In doing so, it added CNBC to its ad syndication network that already included Facebook, Digg and U.K.- based social networking site Piczo.

At CES, Gates had Robbie Bach, president of Microsoft’s Entertainment and Devices Division, talk about the agreement that will make ABC and Disney Channel programs available for download to the Xbox 360.

“On Disney that means shows like Hanna Montana, High School Musical, and on ABC top rated shows like Lost, Grey’s Anatomy, Desperate Housewives and others,” said Bach. “This is a tremendous opportunity for us to continue to expand video content on Xbox and bring more consumers into the Xbox Live experience.”

Xbox Live members will also gain access to MGM films, said Bach. “Xbox Live, when we’re done integrating this content, will offer more than twice as many hours of on-demand, high definition content as any cable or satellite provider,” he said. “Over 35 studios and networks are supporting us now, and it’s quite clear that online distribution is going to be a powerful force in the future of video.”

But advertising opportunities for third parties are likely to remain limited, said Evan Parker, a spokesman for Xbox Live at Edelman. He said most of the advertising on Xbox Live will continue to be banners by the networks and studios for content they are offering. “There are opportunities for third parties to do ads, but by and large you’re seeing advertising for content from the partners,” said Parker.

Bach said Microsoft is also working on a number of Microsoft Media Room-based “interactive applications” with Showtime, TNT and CNN.

About the BT deal, Bach said the company will be selling Xbox 360 consoles for use both as gaming platforms and as set-top boxes for viewing online video.

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