Microsoft has engaged in talks with media companies for a new subscription-based online TV service, one which could allow consumers to access individual channels such as HBO and Showtime, Reuters reports citing unidentified sources. Reuters reports that the options also include creating a "virtual cable operator" -- essentially allowing consumers to "cut the cord" on their existing cable company -- or utilizing the Xbox as an authentication system for existing cable subscribers to view programs with "enhanced interactivity."

The Microsoft TV service -- the pricing of which has not yet been determined -- could pose yet another challenge to cable giants such as Comcast which are already under pressure from the likes of Netflix and Hulu. And it comes as rivals such as Apple and Google have attempted to make strides with next-generation television services.

Microsoft has long held an interest in television, but its efforts have increased in recent months with the success of Xbox 360. Earlier this year, the company announced a partnership to carry ESPN programming via the gaming console.

In a review of that offering, TechFlash's Todd Bishop noted that the service was free to Xbox Live Gold subscribers who accessed the programming through a participating Internet service provider.

The notion of accessing an interactive menu of ESPN programming and highlights on Microsoft's Xbox Live online system is enough to send the average sports fan over the edge with anticipation -- dreaming about conjuring up just about any sporting event around the world, at any moment, with the push of a button.

Next up for Microsoft is a plan to bring Hulu Plus -- a $7.99 per month subscription plan -- to Xbox Live next year.

Will Microsoft look to push even more programming through its Xbox franchise? That looks to be the case, according to Reuters.

[Flickr photo via Gothopotam]