A very crowded and muddled online sector, video-on-demand, has a new player today, and this one is hardly a boot-strapped startup. The prevailing wisdom was that Apple's online domination of digital content would extend from music to video with the expansion of its iTunes store to include TV shows and movies. The prevailing wisdom may need to be rethought.

Microsoft announced today deals with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting System Inc., Ultimate Fighting Championship and Warner Bros. Home Entertainment to sell downloads of television shows and movies to its XBox 360 gaming console beginning Nov. 22. Some content will be available in high definition, which is a differentiating factor for the plan (Of course, it'll take half a day to download a movie in HD).

Beyond the fact that this is the first platform to offer HD downloads, Microsoft has one other huge advantage from the get-go. The XBox 360 is already hooked up to the television and entertainment system. This is the bridge that desperately needed to be crossed for online distribution to really take hold. I know I don't want to download a movie to watch in SD on my HDTV, and not too many other people do. The drawbacks of Microsoft's offering? Well, you do have to buy an XBox 360 instead of a PlayStation 3, or Nintendo Wii.

Will Microsoft topple Apple in the digital media trade with this move? I don't think so. Actually, this is a different segment of the market. Apple's downloads are portable, to a point. Meaning, you can download a show, watch it on your PC, laptop, iPod or even your TV if you have the proper wires, tech acumen and a strong enough stomach to watch poor quality video on your television. Microsoft is serving the high-end, stationary market. You can only download to your XBox 360 and watch on your TV. You won't be able to transfer the file to your flashy new Zune (Although you'd think Microsoft would roll this feature out sometime in the future. It would be pretty cool if you could download shows from your XBox 360 to your Zune using Wi-Fi). Movies will cost between $4-6, and television shows $2 each. There is a pay-or-lose period of time associated with movie sales, so it's more of a rental than a purchase.

Welcome to the party Microsoft, but this move won't be enough to get me to jump the gaming console fence to the XBox side. — Brian Ward

Technorati tags: xbox, vod, microsoft.