Microsoft has cancelled plans to have an Xbox LIVE TV service. According to Industry Gamers, Microsoft’s plan was to launch a service would have required a monthly fee and which would have allowed users to watch all their favorite TV channels, socialize through a redesigned Dashboard, and access popular channels like YouTube and Netflix. Although this service was only planned for the U.S for now, it seems though that the cost of licensing this content has proven too much and therefore the company will instead focus on providing the apps which it does now, instead of focusing on live TV.
If you got more channels than the standard free to air channels it could be an alternative to cable / satellite tv or could be more affordable for example. Students comes to mind too, often if your living in student accommodation you get really fast internet, however all you can get on TV is the basic free to air channels.