Microsoft's partnership with Canal Plus follows the announcement of a similar deal with Sky in the UK in May 2009. By delivering premium content such as live sport and catch-up TV shows through the Xbox 360 Microsoft is positioning the console as a general entertainment platform, with the potential to increase its appeal to a broader range of customers. It is notable that, although Microsoft is pursuing deals with Pay TV operators in Europe, the company has not chosen this route in the US, preferring to partner DVD rentailer Netflix instead.

By partnering Microsoft, Canal Plus is providing its customers with more ways to view its videos. At present CanalPlay and Canal Plus à la Demande are available through the PC but only subscribers to certain IPTV platforms can access the complete on demand library directly through the television set. Distribution through the Xbox 360 will therefore enable more of Canal Plus' subscribers to watch on demand content on the primary screen, enhancing the value of the pay TV subscription.

Of the three available services Foot+ and Canal Plus à la Demande are likely to prove more popular than the transactional CanalPlay store. As with traditional pay TV, uptake of the Xbox/Canal Plus service may be driven by the provision of live sport but catch-up TV will also be a draw. In the 12 months following launch in March 2008 Canal Plus à La Demande recorded 10m VoD stream requests. While consumers may be less willing to pay for movie and TV content on a transactional basis the availability of 3,000 movies through CanalPlay will significantly bolster the existing movie catalogue available through Xbox Live Video Marketplace in France which currently runs to less than 200 titles.

Complete terms of the deal have not yet been announced but it is likely that Microsoft will look to monetise the content by requiring Canal Plus subscribers to also sign up for Xbox Live Gold membership (at an annual cost of €59.99/year) in order to view shows. This is the business model used to provide access to Netflix streaming videos to Xbox users in the US.

The deal with Microsoft is not Canal Plus' first partnership with a console manufacturer. Since 2008 a subsection of the CanalPlay catalogue has been compatible with Sony's PSP. However, the number of titles available for the PSP is small compared to CanalPlay's total catalogue.