Read this: Xbox, watch TV: inside Microsoft's audacious plan to take over the living room - The Verge
Summary: Smith and Whitten first began talking about the greater potential of the Xbox in 2007, just as Microsoft began work on adding Netflix to the 360. The heart of the TV industry beats with the blood shed from fierce negotiations between networks and cable companies, each of which have developed decades of expertise in raising prices, locking out competition, and forcing virtually all consumer-friendly innovation to go elsewhere. Movie rentals now happen entirely over the internet Blockbuster just announced that its closing its last 300 stores. - theverge.com
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