Can Microsoft Save The DVD Market?


Microsoft (MSFT) and UK retailer Tesco announced a new service this morning to provide DVD buyers digitally delivered extras like premium content and interactive features. 

Microsoft’s video-streaming plug-in Silverlight will power the service, which willl be available only in the UK and to Tesco customers who buy certain titles.

The digitally delivered extras will be in DVD or Blu-Ray quality and offer content not available on the physical DVDs. 

Consumers will have access to automatically-updated trailers, viewing parties with online chat, and even other media like MP3s, ringtones, and games.

We don’t think the deal won’t spark a rebound in DVD sales, but Microsoft executives did say the company expected similar services to be offered in additional countries in the future. 

Tesco said it could also lead to other services like web events and the delivery of exclusive content.

Tesco said it had partnered with “a broad range of major movie studios.”  The studios appear willing to experiment with new business models as they watch one of their more profitable revenue streams suffer.  Recently reports pointed to Sony discussing a direct-to-TV rental option delivered via the Internet and YouTube exploring a movie rental business delivered over its massive online video platform. 


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