Our take...
Microsoft's deal with Disney is the latest in a series between the two companies to offer content through Xbox Live Marketplace: movies from Disney became available to rent through the store in July 2007, with sports content from Disney-owned ESPN added in November that year. With ABC signed up, Microsoft's store now hosts television shows from the "Big Four" US television networks - including Fox, NBC and CBS. Notably, only three of these four broadcasters offer content through iTunes; NBC shows are no longer available from Apple's store following a dispute over pricing.

Pending any announcements at Macworld in mid-January, Microsoft is now ahead of Apple in terms of movie deals. Following the Microsoft-MGM agreement both iTunes and Xbox Live Marketplace offer titles from MGM, Disney, Paramount and Lionsgate but Microsoft's service has additional titles from Warner Bros.

The Xbox store is second to Apple's iTunes in the download-to-own online television market and in terms of digital rental movies, an area in which iTunes does not yet operate, Microsoft's service is the dominant outlet in the US. The popularity of the store comes from the ability to watch video content directly on the television screen once purchased through the gaming console, of which Screen Digest estimates there were 5.1m connected via broadband in the US at the end of 2007.

Moreover, following the most recent content deals, the Redmond-based hardware and software giant has highlighted that its catalogue now holds twice as much video content in high-definition as its nearest cable operator competitor, positioning itself as a threat to cable and IPTV operators of closed network services. However, in contrast to these operators, whose closed network services enable users to pick and start watching high definition instantaneously, owners of an Xbox 360 may have to wait several hours before an entire HD TV show or movie has downloaded over the open web.