Finally! Xbox Video Downloads Heading to Canada [Updated].

[Update]: No, it’s not here yet (as of November 2007). At least once a day someone arrives at this blog looking for news of Marketplace’s arrival in Canada. Chances are that it will arrive with the ‘Fall Update’ that should be out within the next two to three weeks. -Nav

Canada’s lack of a digital video download service has always a bit been puzzling. Not only is its broadband penetration rate extremely high, Canada’s digital music sales grew 25% last year, indicating that the market is obviously comfortable with downloads. So I’m very happy to hear about Microsoft’s decision to bring Xbox Live Marketplace to Canada by the end of this year. As it stands now, Marketplace in Canada is a wasteland, featuring the odd bit of Xbox community footage or a Viva Pinata episode – hardly compelling content. Microsoft also stands to gain from increased sales of its Elite console, since its increase storage capacity might actually be of use to Canadian consumers now.

But from a broader perspective, this (as far as I know) will be the first digital video download service in Canada. This means that Microsoft is the first company to negotiate Canadian digital distribution deals with the major movie studios – a rather sad commentary on the state of Canadian innovation and entrepreneurship. While a robust national download service obviously requires a large infrastructure – one that is already in place with Xbox Live – why have there been no pilot projects in Toronto or Vancouver? Or some sort of combined subscription service from the cables companies, allowing one to watch on demand on a TV or dowload to a PC? It seems that while Canada has a high adoption rate of technology, our capacity to use that technology to do something fun and interesting is being hampered by a lack of foresight in the business community. Hopefully, the arrival of Marketplace will spur some Canadian companies – or at the very least, Canadian divisions of American companies – to offer their own versions of Netflix’s on-demand service or Amazon’s Unbox. There are obviously bigger issues than whether we can watch movies, but some increased revenue from these new forms of distribution certainly couldn’t hurt anyone.