Microsoft is putting its plans on hold to offer a streaming "Microsoft TV" subscription service. Unnamed sources familiar with the deal say that Microsoft balked at the high licensing costs, resulting in the change of plans that puts more focus on its Xbox 360 app offerings.

"They built Microsoft TV, they demoed it for us, they asked for rate cards, but then said 'ooh, ah, that's expensive,'" a senior media executive told Reuters (via GamesIndustry.biz). The plan reportedly involved a Netflix and Hulu-like service allowing TV over the internet for a monthly fee. However, the cost of currently-running shows is much higher than offering movies and TV seasons that are available on DVD.

Instead, Microsoft is refocusing its attention to standalone entertainment apps for the Xbox 360. Providers like HBO Go, MSNBC, and ESPN came in December, while more like Fox and the Wall Street Journal are still set to be offered later this year.

"It doesn't mean they won't be back in another iteration," said one media source. "We'll just have to wait and see." Another executive called it an "expensive business," referring to Microsoft's reasoning for putting its plans on hold.