Although Microsoft is still declining to reveal revenue figures for the Xbox Live Marketplace service, the company has said that it is growing by double digits each month.
That's according to a New York Times report which also said growth has been consistently in the double digits since the service began.
"The people we've partnered with see this as a good way to re-connect with the consumer," said Ross Honey, senior director of Microsoft's media entertainment group.
"We allow a consumer who's very engaged in games to shift, with the same box, to watching The Departed."
In the US, Xbox Live Marketplace offers a range of TV and film content, including episodes of South Park and family movies such as Happy Feet - which Honey said has proved highly popular with consumers.
"We absolutely believe that Happy Feet being available brought families to use Xbox in a way they haven't used it before," he said. "And when you bring them there, they start to browse around."
Microsoft is now looking to broaden the range of family entertainment on offer through Xbox Live Marketplace with content such as Nickelodeon's FairlyOddParents.