Earlier: XBox 360 and the digital hub
Now: The XBox 360 to sell TV shows and films via downloads.
The XBox is primarily used by that elusive demographic - 18-34 year-old men. These people don't watch much TV, don't subscribe to newspapers much and are likelier to surf the web or play games. It's not funny to see the amount of real-world socializing gamers do about playing online. (It's the hot workplace conversation topic - even in the land of the NFC Champions).
Microsoft and Sony (whenever the Playstation 3 launches) are going to be prime candidates for trying to convince this demographic to get TV shows and movies via their game consoles. HD downloads is what will drive this at first since there are no HD downloads available on any online stores as of now. Hi-Def DVD standards are still converging, so it makes more sense to just buy your HD content on the 'Net, especially since you are likely to keep your XBox for 3-4 years.
Add a Media Center PC to the equation and there's interesting twists on the whole experience, including recording HD cable and over-the-air shows using your TV tuner card to play back on your TV(s) in the house. Plus downloaded shows via your XBox in the hall can be played back on your bedroom TV.
The digital home entertainment world is converging. And we're still waiting on Apple's ITV.
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