Disney Reaches Xbox 360 Owners Via Movie Downloads on Xbox Live! Blu-ray and HD DVD Dissed?

At the Electronic Entertainment Expo (commonly known as E3) that is currently underway, Microsoft and Disney announced that Xbox Live will be offering film rentals from The Walt Disney Studios. Xbox Live is the online gaming and entertainment network that has become a platform for standard definition movie downloads and the premier method of high definition movie downloads. Disney has been a leading distributor of movies in the video-on-demand arena and this move may put them at the forefront of HD content distribution.

There are already 6 million members on Xbox Live. In less than 8 months since the movie download service launch, there have been nearly 10 million downloads of entertainment content. The movies are available as new releases or classic films and in standard definition or high definition. The prices tag to rent a movie ranges from $3 to $6 depending on the resolution and release timing. Currently Xbox Live is offering more than 2,350 hours of premium entertainment content from 28 networks and studios. Nearly 500 hours of this is HD content. This places the U.S. on-demand, high-definition library for Xbox 360 at more than twice the size of the nearest cable provider.

The deal made between Microsoft and Disney will include new and classic movies from The Walt Disney Studios, which includes titles from Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures and Miramax Films. There will be a variety of titles from these studios available in standard definition and high definition by the end of this month. Additionally, Xbox 360 owners will be able to rent other popular Disney films as they become available. This includes hits such as Bridge to Terabithia, The Queen, and Déjà Vu. Currently, the top HD movies being rented on Xbox Live are The Fountain, Undead, and Blood Diamond.

There are some interesting dynamics at play here. At the outset of the format war, Disney had opted to offer its HD movie selection exclusively on Blu-ray discs, shunning the HD DVD format. This allowed Disney high-def discs to be played on the Sony Playstation 3’s built-in Blu-ray player. The exclusivity deal, however, prevented Microsoft Xbox 360 owners from playing any Disney flicks on the Xbox’s optional HD DVD device. Placing HD disc formats aside, Microsoft has now managed to woo The Disney Studios into providing downloadable rental content through Xbox Live. This provides an opportunity to bring Disney content to Xbox 360 owners. Not surprisingly, all of this comes on the heels of a $100 price drop for the Playstation 3.

Format war? What format war? Blu-ray vs. HD DVD? Who cares? Especially if you already have an Xbox. Try this on for size: for the price of a good high definition disc player and cabling, you can rent a HD movie on Xbox Live once a week for two years. You can ditch the disc player and move to downloading (see post on Trash the Disc). The breadth of content has been an issue, but these walls are slowing coming down. Even if you are not an XBox 360 owner, the move toward using this gaming system as a part of the home entertainment network is intriguing. A $100 price drop on a Playstation 3 may no longer sound very appealing to a HDTV enthusiast (see Price Drop post). The plot thickens.

You can see the orignal press release from this week's E3 by clicking here.