There is no denying it, what Microsoft has done with with Xbox Live is exceptional. It truly came into it"s own when it hit the 360, with the marketplace, great community features and arcade, it is a great place to enhance the gaming experience.
The Xbox Live Marketplace is the perfect platform to deliver content directly to the consumer and as everyone says, the key to the console market is content (games). But content delivered shouldn"t have to be games. Movies and TV series could easily be delivered over the service, with Ads of course, and add another stream of revenue for publishers. It could be easy to ensure that Ads can"t be skipped (not being on PC means few if any would work out a way to skip them), which is a leg up over TV delivered to a PC or TV (with a DVR or similar). More importantly, it would reduce people illegally downloading content as it is a more attractive option.