YouTube has seen off another contender to its throne, with Microsoft preparing to kill off Soapbox, or at least substantially shutter the user-generated portion of the site. If even Microsoft cannot hope to compete, is YouTube too dominant for the health of the online video sector?

No To YouTube, Yes To Soapbox

Before Google spent $1.65 billion acquiring YouTube in 2006, Microsoft was thought to be interested in buying the site itself. When Google got there first, Microsoft issued a statement saying that while it had “evaluated acquiring this type of technology several months ago” it had decided against it. Instead it was going to build its own video-sharing Web site as this was “a more cost-effective way to compete in this new space.”

That service was named Soapbox and was launched in a private beta by the end of that same year. It launched fully in 2007, and was clearly a YouTube clone. The only real difference being its approach to copyrighted material. While YouTube leaves the discovery of this content to the copyright holder, Microsoft took the task on itself.

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Microsoft’s showing at E3 2009 was dominated by its new motion-sensing device. But the company also announced some innovation in the online video market, including the unveiling of a new Zune video marketplace capable of streaming 1080p full-HD quality content for the Xbox 360 console.

Games Consoles

I’ve been banging on for a while now about the importance of video games consoles in getting online video into the living room. That’s because I firmly believe these Internet-connected devices are key to getting quality streaming content onto people’s televisions rather than only on computers as it generally is at the moment.

We’ve already seen a fair few advances in this area. Both the Wii and PS3 are able to provide users with access to Web-based television services such as the BBC iPlayer, Joost, and Hulu. While the Xbox 360, which has no Web browser capability, has Netflix and now the Sky Player providing both downloadable and live streaming video.

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Bing, Microsoft’s latest attempt at changing Internet search, has already caused controversy thanks to its live video thumbnails search results. Not only is porn accessible on the site, but being able to play videos without ever visiting the source raises possible fair use concerns.

Internet Search Options

The Internet search market is dominated by one company - Google. The company boasts an almost two-thirds share of the market, managing 64.2 percent of all searches compared to the 20.4 percent managed by Yahoo! and just 8.2 percent by Microsoft. No wonder then that Microsoft is currently rebranding and re-energizing its search engine.

The result is Bing, which launched over the weekend. It’s very much like Google, sharing many of the same features and elements as the market leader, including results for online video. But Microsoft is also trying to redefine the power of search, which it’s managing to do already, just not in the way it intended. The name just makes me think of Chandler Bing from Friends (pictured above) but there’s worse to come.

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Sky Player is BSkyB’s foray onto the Web, enabling subscribers to access Sky programming on their computer. And now, thanks to a deal between Microsoft and BSkyB, their Xbox 360 as well.

Games consoles are ready-made set-top boxes just waiting for online video content to be added to them. All three of the current-gen home consoles, the Xbox 360, PS3, and Wii, can be hooked up to the Internet and that feature can easily be used for streaming video as well as the intended use of online gaming.

Console Content

Each of the three consoles has seen some movement of late on video content being added. The PS3 is probably in the best position because its built-in Web browser means the Sony console is able to access Hulu, the BBC iPlayer, Joost, and any other streaming video service available on the Web. Xbox 360 owners instead have to rely on applications being added to their console’s dashboard.

It has secured quite a lot of content though. Xbox 360 owners in the U.S. have access to Netflix’s ‘Watch Instantly’ playlist, although they’re not alone. It’s rarer these days for a set-top box or Internet-enabled device NOT to have Netfix integration. Thus proving the company’s commitment to video on-demand.

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Today saw the launch of the long-awaited New Xbox Experience on the Xbox 360. The Xbox Live service now includes the ability to stream content from Netflix.

The New Xbox Experience is an overhaul of the existing Xbox Live online service available to all Xbox 360 owners with an Internet connection. And Web video is now part of the deal.

Xbox 360 owners can now stream any of 12,000 movies and television episodes through their console direct to their TV. And it’s all free for existing Netflix subscribers and Xbox Live Gold members.

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There’s a small event going on right now in Los Angeles called the E3 Media and Business Summit, which is the place where Sony, Microsoft, and Nintendo, as well as a host of games developers unveil plans for the next year.

Today was the first day, and Microsoft was the first of the big three to show its hand. And one of the announcements means that Xbox 360 owners will soon be getting more access to online movie downloads.

This will be coming from Netflix, the online movie rental company, which is teaming up with Microsoft to allow Netflix subscribers, who also own an Xbox 360, to have access to its extensive catalogue through their consoles.

Microsoft’s Mediaroom is currently the company’s IPTV solution which is used by AT&T U-Verse in the States and BT Vision in the UK, allowing TV to be delivered to your home over IP.

By the simple use of a set-top box, you can currently use the service to grab high quality HDTV that is of a much better quality than you would get using a Cable service.

Current Features

It currently also offers features such as quick channel changing, multi-room viewing, and picture-in-picture, but according to an article on Gizmodo, a lot more is coming soon.