Source: Tech news site Gear Live as well as 1up.

　　What we heard: Microsoft's quest to turn the Xbox 360 into more than just a gaming console has led to the introduction of a variety of features to Xbox Live within the last couple of years. With the release of the New Xbox Experience dashboard update in November 2008, Microsoft has integrated such features as Netflix, Facebook, Twitter, and Last.fm into the online service. And according to recent reports, the publisher has also been mulling over the idea of launching its own Xbox Live television channel.

　　Xbox 360 owners may soon be able to watch TV shows on their…TVs. Now, growing online chatter suggests that Microsoft will be getting an assist from the on-demand TV show streaming service Hulu as a way to augment the Xbox 360's non-gaming repertoire. Last night, tech site Gear Live reported that a "reliable source" had tipped off Microsoft's intention to announce Hulu integration into Xbox Live at this year's Electronic Entertainment Expo. The announcement is expected to come during Microsoft's E3 press conference, which is scheduled for June 14 at 10 a.m. PST.

　　Interestingly, though Hulu is currently available for free through a PC Web browser, Gear Live's source indicates that Hulu on Xbox Live will require a subscription fee. The site's source did not say how much Hulu access would cost, though it did indicate that the service would be integrated into the Xbox Live dashboard in a fashion similar to Netflix.

　　The paid model jibes with a recent report from the LA Times. In April, the newspaper reported that Hulu, which is a joint venture between media kingpins News Corp., NBC Universal, and The Walt Disney Company, would begin offering online users a $9.95 monthly subscription option called Hulu Plus, in addition to its free content. Subscribers would gain access to an expanded catalog of shows, while the free model would continue to offer the five most recent episodes of a given program.

　　Gaming Web site 1up also has sources close to Microsoft confirming the existence of a Hulu channel on Xbox Live, though the informant's info calls into question an E3 reveal. According to 1up's source, Microsoft already has a Hulu application that can run on Xbox Live. However, the publisher is currently grappling with licensing issues related to streaming Hulu programming through its console onto TVs. Hulu's content comes from a variety of networks, including NBC, ABC, Fox, and Bravo, and 1up's source indicated that "a lot" of these media companies have been unwilling to make their shows available on TV through alternate means.

　　The official story: “Microsoft does not comment on rumors or speculation.”--A Microsoft representative.

　　Bogus or not bogus?: Looking not bogus. Hulu would certainly fit right in with Xbox Live's other non-gaming services, and Microsoft has introduced similar services in the UK and Australia. However, it remains to be seen whether the publisher can resolve its licensing issues before E3--if at all--and to what extent the networks will allow their shows to be streamed on TV.