To celebrate its one-year anniversary on November 22nd, 2006, Microsoft is implementing what is sure to be a killer app to the Xbox 360 Marketplace: High definition and standard definition TV show and movie downloads.

As speculated earlier, come November 22nd, 2006, high definition and standard definition TV show and movie downloads will be available from the Xbox Live Video Marketplace.

Shows from CBS, MTV, Comedy Central and other networks will be available for download at launch. Movies from select movie studios, Warner Bros., Paramount, will also be available for download.

IGN has posted a nice write-up about about how the Video Marketplace will work.

…all Xbox 360 owners with an HDTV will have access to HD movies, regardless of whether they own an HD-DVD or Blu-Ray player. It doesn’t end with movies, though. The video marketplace will also feature television shows, music videos and game videos to purchase with Microsoft points. The service will be available to both Xbox Live Silver and Gold members and promises over 1,000 hours of unique content by the end of the year, with at least 200 of that available in both standard and hi-definition.

This is amazing news! Those that can’t afford or don’t want the HD-DVD player will be able to enjoy hi-def content for a nice number of Microsoft Points.

And just how many Microsoft Points are we expected to pay for movie and TV show downloads? Well, Microsoft isn’t talking numbers yet, but a movie up at xbox.com offers hints at a pricing structure. Apparently $6, 480 points, will net you an HD movie, while $4, 320 points, will get you the standard definition version of a movie. This is all a great pricing structure, as you can download a movie for the same amount of points as you would if you were renting it from Blockbuster or some other rental outlet. The HD price, logically, should be a bit higher than the standard def price, and $2 extra is a pretty nice price point without going overboard.

TV show downloads will be 240 points ($3) for both the HD and SD versions, which again, is a fair price, considering the shows will be offered in HD.

And if you’re wondering if there are any playback limitations to any of these videos, you’ll be happy to hear that once you buy a TV show, you own it.

After purchasing them with Microsoft points, owners will begin downloading them and will own the show. That means they can delete it off of their hard drive and download it at a later date without having to pay for it again.

Movies, on the other hand, are quite a different story:

Movies will be output in a rental format. This is necessary in part due to the limited space on an Xbox 360 hard drive and the massive size of an HD movie. The standard definition movie we were shown clocked in at 1.2 GB while the HD version of the same movie was nearly four times as big at 4.7 GB. Once you download a movie, you’ll have 14 days to begin watching it. After you start watching it, you’ll have 24 hours before the rental expires and the movie is “returned.”

I really like the idea that a movie is available for viewing for 14 days. Sometimes, especially due to the nature of the file size, a gamer might not be able to watch the movie right away. 14 days is a very generous grace period. The 24 hour viewing limit after the first viewing is also nice, since that gives enough time to promote repeat viewing.

But if a movie, especially an HD one, is 4.7 gigs big, won’t that take a while to download? Fear not! Microsoft has already thought of this:

To help solve that problem, Microsoft is launching a new service to handle the video marketplace that is outside of the one currently used for the old marketplace. Also, you’ll be able to begin watching videos before they are fully downloaded, something you can’t do right now with trailers on Xbox 360. Still, no guarantees were made about speed. We were told that downloading an HD movie would be more of an “overnight type of thing” or something to be done in the background while playing a game.

It’ll be interesting seeing how this plays out. If it’s a background downloading thing, does that mean the downloads will stop if a user tries to hop on Live? Does this mean that if a user is trying to download an HD movie, they have to sacrifice some multiplayer gaming for a night? Also, just what exactly is this “new service” that’s going to handle downloading for the video marketplace? All these details are nice, but a bit vague at the moment.

If you think you’re going to be a heavy downloader of TV shows and movies and are worried about how you’re going to be able to find your content, don’t worry. It seems as if everything is going to be neatly organized:

The video marketplace will be accessible through the media blade on the Xbox 360 dashboard. When you click on it, you’ll find categories for movies, tv shows, music videos, game videos, and clips. Each category is broken up into subgroups when you click on them. For example, the tv shows category expands to have sorting options for new arrivals, network, clips, genres, and all. From there you can customize the search even further with the ability to sort by title, episode number or download rank.

This is great news. As someone who watches a lot of TV and is used to the way DVRs organize shows, this sounds like it’ll function in a similar way. Nothing was mentioned about movies, but hopefully a similar structure can be implemented. It’d be nice being able to sort through genres of movies, or even by actors. Though with the movies being available on the hard drive for a short amount of time after the initial viewing, it might make sense for Microsoft to not implement such a structure.

IGN also has a list of content of what viewers should and should not expect from the Video Marketplace:

Obviously, you won’t be seeing any Sony Pictures movie releases on the video marketplace. The networks we were told would be providing content initially, with more to come, are CBS, Turner, Warner Brothers, Paramount, UFC, and MTV Networks (including VH1 and Cartoon Network). It’s up to the content providers to determine which shows or movies will be up on the new-look Marketplace and what formats they will arrive. In general, if the content is available in widescreen or HD, then it will appear that way on the service alongside their standard definition cousin. Some shows we were demoed, such as Aqua Teen Hunger Force, are only available in standard definition by default so no HD versions will be available. Others, such as CSI, will be made available for the first time in a digital distribution HD format through the video marketplace. The availability of the content will be determined by the providers. Some television shows will be available the next day for download, while other videos, such as movies, will obviously take longer to reach the marketplace.

This all makes sense. TV shows should be available the next day, as they are with Microsoft’s competitors. Movies understandably will take a longer time getting to the Marketplace. After all, movies will appear after a movie’s run in the box office, so as to not take sales away from the movie. I’d imagine that the movies would appear on the Marketplace sometime around the DVD release, but this statement is just speculation.

The following is what you can expect to be on the Marketplace at launch:

“Robot Chicken” and “Aqua Teen Hunger Force” from Adult Swim
“CSI,” “Survivor” and “Star Trek” from CBS
Emmy and Peabody award-winning “South Park” and “Chappelle’s Show” from COMEDY CENTRAL
“The Real World” and “Pimp My Ride” from MTV
“Avatar: The Last Airbender” and ”SpongeBob SquarePants” from Nickelodeon
“Skyland” and “The Nicktoons Network Animation Festival” from Nicktoons Network
“M:i:III,” Nacho Libre” and “Jackass: The Movie” from Paramount Pictures
“Carpocalypse” and “Raising the Roofs” from Spike TV
“Race Rewind” provided by NASCAR.COM
Select episodes of the original season of “The Ultimate Fighter” reality series and the “UFC: All Access” shows from the UFC
“Breaking Bonaduce” and “Hogan Knows Best” from VH1
“The Matrix,” “Superman Returns” and “Batman Forever” from Warner Bros. Home Entertainment

As of now, there are no plans for the transferring of any video content to any portable devices (or other devices in general). However, according to IGN, Microsoft said that some Zune support could be coming in the future. Hopefully Microsoft seriously thinks about this, because video transferring from the Xbox 360 could become the Zune’s killer app.

This is an exciting way to celebrate Live’s first anniversary. The promise of even more, future content has this movie and TV show lover foaming at the mouth.

What shows and movies would you guys like to see on the Video Marketplace?

Thanks for all the info, Roy Johnson, LinkinPrime, kissmygritz, Derka, VALKYREMISSILE and everyone else who submitted this news!