Microsoft had been rumoured to be working on a online TV subscription service and apparently the talks had been going on for some time but according to Reuters the plan has been put on hold due to licensing costs that where to hight for the business model Microsoft where planning.

“They built Microsoft TV, they demoed it for us, they asked for rate cards but then said ‘ooh ah, that’s expensive,'” said one senior media executive who had been involved in the talks.

Microsoft haven’t commentent on the story but it does seem like they are focusing on content deals on the Xbox 360 (like iPlayer and LoveFilm). It would be great to see some new media features with premium content in Windows 8 but it looks like its not going to be a monthly subscription model

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