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Microsoft Has Built An Interactive Video Production Studio In LA, With More Than 150 Employees

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Today at the D: Dive Into Media conference, representatives from Microsoft provided more details on its new video production studio, which will provide a whole new level of interactivity for viewers. Nancy Tellem, Corporate VP of Microsoft’s L.A. Studios, said that the company has already hired 150 employees in its Santa Monica studio in L.A. That’s a huge commitment to creating a whole new type of content for its Xbox game console.

Tellem joined Microsoft last year to head up its new content efforts. In addition to the usual broadcast-like TV content, Tellem said that the company will be investing heavily in interactive content, as it can leverage products like Xbox Kinect to allow users to provide new ways for viewers to play with stuff on the screen. “We’re in a unique position to produce content with a much higher level of interactivity,” Tellem said.

Yusuf Mehdi, SVP of Interactive Entertainment at Microsoft, said the company has sold well over 75 million consoles worldwide, and Xbox Live has more than 46 million subscribers. Users spend an average of 87 hours on the Xbox per month, with the majority of that being non-game content. While the user base is still primarily male, Mehdi said 38 percent of its users are women, and 51 percent are people with kids.

Tellem sees that type of content being particularly attractive to younger viewers using the console. “Everyone is very different, particularly when you look at the younger demo,” Tellem said. “Interactivity is a natural extension of what they do.” While the company plans to make its content available through its Xbox Live service, it will also look to monetize that content through ads.

One thing that Microsoft is not interested in doing is becoming a cable competitor by building bundles of content. Part of that is about being friendly to content companies and distributors that deliver video over its devices. Part of it is also not feeling like it can provide real value by being a virtual cable provider.

The news comes as rumors have swirled around the next-generation Xbox, which is expected to be called the Xbox 720. Those include the belief that the new Xbox will have always-on DRM, which will destroy the used-game market. Also, the revelation that the next-gen game console will require Xbox Kinect to work. But Mehdi wouldn’t comment on the company’s plans for the next-gen box.