This week, Microsoft hired Nancy Tellem, the former CBS exec, to run a dedicated Xbox content studio. As Microsoft’s new Entertainment & Digital Media president. Tellem will work under Don A. Mattrick, the president of the company’s Interactive Entertainment Business. That’s the unit that developed the Xbox, the Kinect and the Mediaroom software that quietly powers a number of the world’s set-top boxes.

This means the woman who greenlit hits like "CSI," "Survivor," "Everybody Loves Raymond" and "The King of Queens" - and helped create "Friends" and "ER" - is now developing content for Microsoft. Wow.

Tellem’s new studio will design “interactive and linear content for Xbox and other devices,” according to Microsoft. “In addition to running the production studio, she will help spearhead the company’s efforts to turn Xbox into a destination where consumers can enjoy all their entertainment in one place.”

Microsoft Wants To Lure New Content

According to analyst Richard Doherty, who tracks the intersection of technology and content for the Envisioneering Group, Tellem will be responsible for luring new content to the Microsoft Xbox platform, competing with Google’s YouTube and Netflix in what he characterized as a bidding war. She also will be tasked with working with content providers to help develop content like the two new Kinect programs, “Kinect Sesame Street TV” and “Kinect Nat Geo TV”, that launched Tuesday.

The Xbox remains the most socially connected entertainment platform, Doherty said, despite the Sony PlayStation’s best efforts. And that is going to appeal to Hollywood’s content mavens.

“J.J. Abrams was constrained by what ABC could do with ‘Lost,‘” Doherty said. “There wasn’t Twitter when it started - the show would still flash ‘Go to lost.abc.com’ when the show aired. When I talked to Abrams years ago at a Digital Hollywood [conference] with his production team that was with him, they were planning for social media that wasn’t there yet.”

“[Tellem] probably is the most important influx of new DNA, entertainment DNA, into a tech company, since Terry Semel at Yahoo,” Doherty said, referring to the former co-chief executive of Warner Bros. who was ousted in 2007 after netting more than $500 million in stock and other compensation.

Coincidentally or not, Microsoft on Tuesday also announced the release of two interactive pieces of content that bring a new dimension to the concept of “program”: Kinect Sesame Street TV and Kinect Nat Geo TV. Both pieces of interactive software ask the children watching them to participate, such as clapping their hands or jumping up and down.

Xbox: Stumbling Toward Interactive TV

The Xbox, of course, began life as a game console, adding downloadable movies to the Xbox 360 way back in 2006 with the Xbox Live Marketplace. Netflix added streaming movies to the platform in the summer of 2008. Microsoft’s Kinect ushered in a new level of interactivity in 2010, but only to games specifically designed for the motion-sensing peripheral. Kinect’s voice commands could also be used to seek out TV shows and movies as a voice-operated remote control. In December 2011, Microsoft added the ability to retrieve programming from Verizon FiOS and Comcast’s Xfinity services via the Xbox interface.

Microsoft first tried its hand at TV-inspired interactivity in 2009 with “1 vs. 100 Live” and “1 vs. 100 Extended Play,” two related shows that let Xbox players compete - live - in a virtual version of the TV game show 1 vs. 100. Over two seasons, U.S. and U.K. players could participate in hosted live events that ran between 30 minutes and two hours. The show was entirely free, with revenue generated from advertisements, just like “real” TV.

“Gaming is usually a premeditated experience where you know what you want to play ahead of time,“ said Manuel Bronstein, director of 1 vs 100, told The Los Angeles Times in 2009. "We wanted to create an impulsive experience that players might discover in the same way they flip on the TV and browse the channels.”

According to reports, however, the show suffered from lack of revenues because Microsoft shuffled it around too much internally, not devoting enough resources to sales and marketing.

Kinect Sesame Street: A Glimpse Of The Future?

Leticia Barr, the founder of the Tech Savvy Mama blog, and one of the testers for “Kinect Sesame Street TV” and “Kinect Nat Geo TV”, said that her kids couldn’t really tell whether the games were a TV show or not.

“They were talking about that was kind of a show, but there were times when we could go in and play, with the favorite characters, and they were talking about how this was a hybrid of a show and a game at the same time,” Barr said. “It wasn’t one or the other. It was this very fluid combination of both.”

(Both “Kinect Sesame Street TV” and “Kinect Nat Geo TV” are available in disc form and as a download through via Xbox Live, according to the Associated Press. For $30, users can purchase a package that includes eight 30-minute episodes on two discs. Users can also purchase single episodes for $5.)

Making Cents Of It All

In Dec. 2011, Microsoft refreshed its Xbox Live software, adding new movie and television content the more than 65 entertainment apps already available - including Netflix, Hulu Plus, HBO GO, MLB.TV, ESPN, YouTube and VEVO. Global video consumption on Xbox Live has increased 140% during the past year, Microsoft said, with more consumers watching video than using the Xbox to play games.

“Whether you are voting for your favorite contestant on a TV show or playing a game, entertainment is becoming more personalized and social, driven by the Internet and new tools to interact with content,” said Phil Spencer, corporate vice president of Microsoft Studios, and Tellem’s boss, in a statement. “We are embarking on a new chapter with the creation of a studio dedicated to making original interactive and linear content…”

Tellem’s role appears to be designed to make sense of this combination of original programming, interactive television and interactivity. Don’t be surprised to see Tellem orchestrate deals that include Xbox SmartGlass the second-screen, tablet-based control app that Microsoft revealed in June. And having spent time as Les Moonves’ right-hand woman, Tellem has the clout in Hollywood to equal Robert Kyncl, the global head of content at Google/YouTube.

According to Doherty, Microsoft’s combination of pre-recorded content, interactivity and an online Internet connection offers a combination no rival can match.

“There are producers that the networks are not appreciating enough, and have tremendous ideas for social media - when everybody gets excited - oh my gosh, ‘30 Rock’ is going to be filmed live!’” he said. “We’re talking episode-and-a-half sort of scenarios, multiple-ending sort of things. The talent in L.A. and London and Mumbai, they’ve got the ideas that Microsoft is better positioned to deliver on than anyone else, with Apple as a last resort.”

Lead image courtesy of Shutterstock. Other images courtesy of Microsoft.

Instead, I'm 26, broke, and trapped in Glens Falls, New York. I vent my frustrations by writing comedy pieces for the Huffington Post, I run a blog about social publishing, and, for some odd reason, I'm more popular than Serena Williams, Newt Gingrich, and Stephen Colbert ... on Twitter. Sadly, this doesn't help my chances with Serena or make me any money.

I'd like to change that this year.

The Two Traditional Funding Options

I'm not big on corporate sponsorship. I'll work with a company if it makes sense, but I'm burned out from so many years of chasing sponsorships. Sponsorship is a game for the well-networked or those whose presence is so big that they can't be ignored.

Nor do I want to deal with investors. I could write a business plan, take it to some venture capitalists, and pull in the money, but at what cost? The last thing I want is a group of MBAs watering my project down to please shareholders.

The Third Way

I started researching crowdfunding as an alternative. I came up with the unusually bright idea of selling advertising space on the back of 300,000 business cards. $1 gets someone an advertisement on one card, and they buy as many as they want. The incentive is that the cards are being used to set a Guinness World Record for "tallest wall made out of business cards," which makes them desirable and a collectible piece of advertising after the record is set.

A Million High Fives (or #AMHF) is the project I'm attempting to crowdfund and form a new business around. Although #AMHF is supposed to accomplish many things, I also want it to make crowdfunding a cool thing to do. If I can do it, you can do it. And if we can do it, then who needs sponsorship or venture capital?

I'll be documenting the crowdfunding of A Million High Fives and my new business from concept to cash exclusively here on ReadWriteStart. I have no connections, no money, and no resources -- just a big idea and a platform here on ReadWriteWeb. If I fail, you'll see every step of the fall. If I succeed, we'll have plenty to learn along the way. Not to mention, we'll be setting a Guinness World Record together. How cool is that?