Reuters has some information suggesting that Microsoft is getting ready to launch a video subscription service for the XBox 360. The details are scarce and nobody knows yet how this will work, but Microsoft has several options.
The first option is to become a virtual cable operator and charge for bundles of channels. This is a model that we all know well and one that networks are familiar with. They could also create one app per channel, similar to what Roku does. It will be interesting to see what happens with this one.