Microsoft's new video on demand service for the Xbox 360 sparked such a strong interest that its servers were overwhelmed from the demand, leaving many users stuck attempting to start a download and many downloads being cut off, according to NewsFactor.  To make matters worse, the service charges before the download completes, which means there are a lot of users who have been charged for something they never received. 

Unlike music download services such as iTunes, Napster and so on, Microsoft's service offers complete movies and TV shows at standard definition, which can potentially be several hundred times larger than an individual song. Its High Definition versions are even much larger again.  In an aim to overcome help overcome this issue, Microsoft has set up a hotline (1-800-4MYXBOX) for customers to call in about complaints or to get refunds for title purchases that failed to download. 

While it appears that Microsoft has definitely succeeded in attracting attention to its Xbox 360 Live video service, unfortunately this first experience for its customers is bad news, as it will be enough to make some customers rethink about using this or any other online video on demand service.  Satellite and Cable TV on the other hand is immune to large audiences, since even if everyone purchased a Pay Per View title at the same time, the source has to only broadcast the transmission once and every client just has to tune into this transmission.  However, when it comes to online video on demand the source must send a separate copy to every client that purchased a title.  This means that 1,000 online purchases for a given title at the same time means that the source needs to upload this title 1,000 times to cover all its clients, assuming everyone receives their copy successfully. 

As Sony has yet to launch a TV show / Movie download service, this will surely give Sony advance warning on what it needs to watch out for in order to make a successful start.