Don’t Expect More Web Series on Xbox Anytime Soon

Xbox 360While Felicia Day and her web series The Guild may have scored a great deal for distribution on the Xbox and other Microsoft platforms — which involved promotion to a massive audience, a Sprint sponsorship, and allowed her to keep her intellectual property — other web series creators may have trouble following in her footsteps.

We sat down with Ross Honey, Microsoft’s (s MSFT) general manager of global content acquisition and strategy in its media and entertainment group, earlier this week in Redmond to talk about the kinds of content the company is looking for, and how web video plays into that. Honey’s answers didn’t make the Xbox Live sound like much of a web content distribution opportunity. As he explained it, the process of cutting deals for web series and securing and inserting ads in them is just too much hassle.

The Xbox doesn’t have a robust ad insertion platform, so instead of individual ads, Microsoft has done overall sponsorship deals as it did with Sprint and The Guild. If a web series can’t attract a major sponsor, there won’t be an easy way for Microsoft to monetize it (the company has done microtransactions for series like Clark and Michael, selling episodes for 25 cents, but that didn’t generate much interest).

The other issue, said Honey, is figuring out what content is going to “move the needle” for Xbox, as well as determining how much energy to put into acquiring it. “Getting Dorm Life on Xbox is not a bad thing,” said Honey. “Is it going to move people to get on Xbox? Maybe.”

Microsoft isn’t against acquiring web content outright, it’s just a matter of priorities. In addition to The Guild, Microsoft also commissioned its own horror comedy shorts last year. But according to Honey, it takes a lot of effort to get a web content deal done for video that, as a percentage of what is watched, is not very high. In other words, for the scale Xbox Live is at, doing deals with individual creators was too much fuss when they could put that time into working with proven premium content companies.

Honey made it pretty clear that Xbox isn’t in the web video acquisition game, but didn’t rule it out entirely. Based on our talk, we can offer up this tip from him for those who absolutely gotta be on Xbox: “Gamers love watching things about gaming.” Honey says that the two most popular TV shows on Xbox are South Park episodes “Make Love Not Warcraft” and “Guitar Queer-o.” Having a gamer bent is, in part, why Microsoft was so aggressive in obtaining The Guild on an exclusive basis. It also didn’t hurt that The Guild already had a sizeable audience and that its star, Day, basically became a spokesperson for Xbox.