Microsoft's ambitions to launch a subscription service for TV shows and movies have been put on hold, according to a report on Reuters.

The company is said to have spent the last year trying bring media partners on board, and even built something called Microsoft TV for demonstration purposes, but decided to pull back after realizing that the licensing costs were too high for the business model it envisaged.

Early versions of Microsoft's TV service included features such as voice and motion control for navigation. Similar to Netflix, Microsoft wanted to give users the option of paying a monthly fee for on-demand access to TV shows and movies. But they were hopping to go a step further by offering currently airing content, giving it a media library similar to Hulu Plus, and even streaming live network programming.

Even though talks with Microsoft have cooled off, media companies hold out hope that the Redmond giant will eventually come back to the negotiating table.

Microsoft is still working closely with the TV business, but for now they're refocusing their efforts on delivering content over the web and on Xbox Live to existing subscribers of cable and other services, instead of building a rival platform.

Just last month the company announced a bunch of Metro-inspired  apps from different content partners as part of an Xbox 360 dashboard update. The laundry list of content partners included, Dailymotion,, TMZ, UFC, VEVO, Vudu, HBO GO, MLB.TV, and Xfinity On Demand and others.