Next Tuesday Sky will launch Sky by Broadband, offering TV on demand through PCs, as long as they have Microsoft's Media Centre software. The service is only available to subscribers to Sky's premium movies and sports package.
The partnership between Rupert Murdoch's News Corporation and Bill Gates' Microsoft also extends to the US. There content from DirecTV, the News Corporation satellite TV subsidiary, will also be distributed to Media Centre PCs.
Meanwhile, reports say that Google is set to debut paid-for video content on its video search engine and that its first content partners are US broadcaster CBS, news provider ITN, music video owner Sony BMG and the US National Basketball Association.
The Wall Street Journal and the Financial Times both quoted a person familiar with Google's plans who said that the service will be called the Google Video Store and will require users to download a Google video player onto their computers.
The move will be seen as a further challenge to rival Microsoft.
However, Google was not commenting ahead of a speech by its co-founder Larry Page today at the Consumer Electronics Show in Las Vegas.
Speculation about products and services Google might announce previously pointed to a low-cost PC.
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