Xbox to take on Netflix with original shows

Microsoft is going Hollywood with a cast including comedians Sarah Silverman and Seth Green, aspiring World Cup players and eerily human robots. All are involved in shows that Microsoft's new Xbox television studio plans to roll out globally starting in June.

Helmed by former CBS honcho Nancy Tellem, who Microsoft hired 19 months ago to build a TV powerhouse from the ground up, the studio now has six series lined up -- including a science- fiction thriller called "Humans" about humanoid robot workers -- and more than a dozen projects in development.

It's unfamiliar ground for the world's largest software maker, which has zero experience in original TV programming and is wading into a crowded field where Netflix I and Amazon. com have generated hits such as "House of Cards." Yet Microsoft is betting on the new studio to produce shows that will attract consumers to its Xbox game console, lure subscribers to its Xbox Live online service and eventually anchor a consumer home entertainment network that will tie the company's devices together.

"TV, as the highest-reach form of entertainment you can find, is a critical part" of wooing consumers to Microsoft, said Phil Spencer, who was last week named head of the Xbox business.

Microsoft is pushing ahead with the original shows even as new chief executive officer Satya Nadella has yet to fully articulate his plans for the company's consumer business. The Redmond, Washington-based software maker last month added an activist investor from ValueAct Holdings to its board who wants the company to shift its focus away from expensive consumer initiatives. The two top executives who began the programming effort -- former Xbox chief Don Mattrick and CEO Steve Ballmer -- are also gone.

Microsoft remains committed to the effort, Spencer said in an interview. Still, success for the Xbox television studio may be elusive as companies fight for consumers’ attention. Netflix released its first original show in 2012 and has now greenlit more than two dozen, while Amazon last week announced a $99 box for watching Web-delivered shows called Fire TV.

Sony’s entertainment studio has said it will produce an original series, a drama called “Powers,” for the PlayStation Network.

“This is not an easy business,” said Tellem, who oversaw network entertainment at CBS between 1998 and 2009 when shows such as “CSI” and “Survivor” became hits. “There’s a huge failure rate. You have to get up to the plate a lot. Hopefully we can have a higher batting average than most, but it’s a long process.”

Unlike the critically-lauded titles Netflix chooses by number-crunching its subscribers' favorite actors and genres, Tellem said Microsoft's marching orders are to focus on its gamer audience, typically males between 18 to 34 years old. "We aren't trying to find something that's going to be accepted by the largest common denominator, which is what a lot of people in the business look for," she said. "We're focused on what we feel our audience on our platform wants." The company is taking the unusual step of only greenlighting shows that can be combined with the interactive components to encourage users to engage across consoles, phones and tablets. By hiring a team of young Hollywood executives and pairing them with software engineers, Microsoft wants to finally crack a code that the entertainment and game industries have had trouble doing alone. "Building a TV studio is just as hard as a building a game studio -- every piece of content is a potential hit," said Brian Blau, an analyst at Gartner Inc. "Every piece of content is a potential miss and until you have a number of hits under your belt, you aren't a player."

Microsoft also needs to spur Xbox One sales, which have lagged those of Sony’s PlayStation 4 in recent months.

Bloomberg