Technology juggernauts Microsoft Corp. and Samsung Electronics Co. on Monday outlined their distinct approaches into content as both step gingerly into the entertainment business.
Microsoft, which recently hired former CBS Network Television Entertainment Group’s Nancy Tellem to run its newly opened L.A. production studios in Santa Monica, Calif., said viewers will start to see original content from those studios this year.
Tellem, speaking at the All Things D’s Dive Into Media Conference in Dana Point, Calif., said the studio, which has a production staff of 150 people, will start to roll out a range of original shows “hopefully within the year.”
The shows will vary in format from short-form videos similar to what is found on premium YouTube channels to HBO quality shows on the level of “Game of Thrones,” Tellem said in her first public interview since taking the job at Microsoft in January.
Microsoft will initially distribute its original shows on Xbox Live, the online platform accessible on its Xbox 360 video game consoles. The company currently has 46 million Xbox Live users, said Yusuf Mehdi, Microsoft’s senior VP of Interactive Entertainment. Only users who pay $60 a year for the Xbox Live Gold premium service would be able to watch the shows, however. Microsoft in the past has estimated that about half of Xbox Live users opt to pay for the premium service.
Mehdi and Tellem said Microsoft could seek to make additional money by distributing the shows through other distribution channels, though they did not say which methods the company would consider.
For now, Microsoft is content to subsidize the production costs and see how much money it can make through advertising and through additional paying Xbox Live Gold members.
The company already has more than 100 media partners that provide their content on the service, but this effort is a significant effort by Microsoft to create original content as a means of differentiating Xbox Live from other online TV entertainment services such as Roku, PlayStation Network and a number of companies building connected TVs that have similar offerings, including Samsung.
David Eun, a Samsung Electronics executive VP who spoke at the All Things D conference after Microsoft, laid out a much more cautious approach to content.
“We don’t see ourselves as a content company,” said Eun, who has worked in senior positions at Google, Time Warner and NBC prior to joining Samsung 15 months ago as executive VP of the Global Media Group. “I think of us as a platform company.”
That said, Samsung has been cautiously dipping its toe in the entertainment business. Last year, it purchased music streaming service provider mSpot and launched a music service for its Samsung smart phones. At the Consumer Electronics Show in January, Samsung announced it would help produce short form videos and branded entertainment that would be supported by advertisers. The company also has a division -- called the Media Solutions Center -- that facilitates the distribution of ads on its devices.
In addition, the South Korean company has been making a concerted effort to become more engaged in the U.S. media and technology scene. On Monday at the conference, Eun announced that Samsung launched an Open Innovation Center with offices in Palo Alto, Calif., and New York City, that would serve as an accelerator for promising start-up companies and, possibly, acquiring them.
“As much as you invest internally, you’re not going to get everything you need from in-house” talent, Eun said of Samsung, which has 230,000 employees and spent $10.5 billion in research and development last year.