The pilot will give viewers access to 300 hours of content, including shows such as Peep Show, Shameless, Hustle, The Young Ones and League of Gentlemen.
The service is free to consumers, with Microsoft securing an exclusive deal with GroupM for its clients' ads to appear in pre, mid and post-roll slots during the testing period.
MSN, which attracts 16 million unique users every month, offers short-form video across a range of genres including news, movies, music, TV and sport.
The software giant is entering the long-form VoD market following the blocking of Project Kanagroo - the planned VoD service from ITV, BBC Worldwide and Channel 4 - by the Competition Commission earlier this year.
The VoD market already includes the BBC's iPlayer, ITV Player and Channel 4's on demand service 4oD, with US online video giant Hulu also due to launch in the UK later this year.
VoD is a growing market with 23% of consumers in the UK watching video online, according to ComScore.
The brainchild behind the iPlayer and Project Kanagroo, Ashley Highfield, now managing director and vice-president of Consumer and Online, Microsoft UK, said MSN aims to be one of the UK's leading free premium VoD destinations.
For the beta testing period, MSN Video Player will offer shows from distributors BBC Worldwide and All3 Media.
During the pilot period, MSN will work alongside broadcasters, studios, producers and distributors to extend the service and build a fully comprehensive library of entertainment.
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