A few weeks ago after the Xbox 360 Dashboard update was released and the Video Marketplace announced, I wrote about how streaming WMV was the answer to Microsoft’s hard drive problems. Well, it seems as if I won’t win this one, at least in the short term. Microsoft has already stated the Video Marketplace won’t allow for purchasing content from and saving it to a PC and streaming it to the Xbox 360. It’s an easy solution to fix a potentially major obstacle, especially for a software company that has proven in the past it can make such adjustments rather swiftly. Or maybe I’m giving Microsoft too much credit, since they’ve shown with the Zune they don’t yet quite seem to know what to do with DRM.

Regarding DRM, I did do a quick test with streaming DRM content to the Xbox 360, and I was left disappointed. Simply put, it doesn’t work with Windows Media Player 11′s Media Sharing functionality. Strange, since I had mentioned audio and video DRM is supported by standard Media Center Extender devices over XP Media Center, and the Xbox 360 is essentially a stripped down MCE. With the addition of video streaming with WMP11 I would have expected DRM to be supported here too.

There obviously is a disconnect between WMP11 and the media sharing providing the requesting device the necessary DRM information. My experiment consisted of subscribing to CinemaNow, downloading a movie and sharing it through WMP11, and trying to stream it through my Xbox 360. The DRM was there, and I could play the media file on my PC, and it was even selectable from my Xbox 360 so I know the media file itself was being shared. However, when trying to play it on the 360 I received the following error message:

Can’t access the protected content on your computer. Status code: 52-04-C00D28B0

A couple of years ago, Microsoft was heavily pushing the VC-1 codec as the next high definition video standard. During that time, there were a few publishers of titles which supported VC-1 on DVD. Of course, they couldn’t be played in anything other than a PC, but at least they were available to show off the quality. HDNet published the majority of these DVDs, but there were at least a few mainstream titles (and a couple of adult titles as well, ahem) with WMVHD versions. One title in particular was T2:Extreme, which I recently picked up for testing purposes.

The second disc of this DVD release contains the WMVHD version. After inserting the disc into the Xbox 360′s disc drive, the DVD menu screen immediately started playing. I selected the WMVHD menu item and got a message stating I need to install the InterActual video player on a PC to view it. Obviously the Xbox 360 was treating this as a standard DVD, and rightfully so since the file structure of the disc was of a typical DVD. Disappointed but not defeated, I thought maybe it would play from the Media tab by selecting Video, since the Dashboard update included support for WMV playback from a CD or DVD. But when navigating to the Media tab, the Video option wasn’t available, meaning the Xbox 360 considered this disc a standard DVD and nothing more. I briefly toyed with copying the WMV files off the DVD and onto separate media, but they were DRM’ed and I couldn’t figure out which files were necessary to allow playback. With my previous experiment with streaming DRM content, I figured the Xbox 360 couldn’t handle it anyway and finally gave up.

So there it is. I have a feeling Microsoft made the decision to allow Video Marketplace purchase and playback strictly from an Xbox 360 because they, for whatever reason, weren’t able to include the necessary DRM functionality in the recent Dashboard update. For now the best I can do for streaming video is the HD content from IGN and Gamespot and the various WMV podcasts available. And of course I now have the Video Marketplace, so I have an option for HD studio content as well. But most of all, my past experiences with Microsoft have given me hope a solution for streaming protected content from my PC is a realistic possibility in the near future.