The days of the traditional television set are numbered, according to Bill Gates. The Microsoft chairman today announced a deal with BSkyB, the British satellite broadcaster, which will allow programmes to be viewed through Microsoft’s near-ubiquitous Windows computer software.

Speaking at the Consumer Electronics Show in Las Vegas, Mr Gates said the tie-up with Sky, which is 37.2 per cent owned by News Corporation, parent company of Times Online, heralded the arrival of the much-trailed "digital lifestyle".

It has long been suggested that high-speed broadband internet connections will become the main conduit for television, music and telecoms services.

The deal will make Sky content available to subscribers via Microsoft’s Media Centre software from Tuesday. The so called "on-demand" technology will allow viewers to watch what they want when they want it.

"Sky by broadband" will include "hundreds of movies to download and hundreds of sports clips to stream", Microsoft said in a statement. Content from MTV, the American music channel, will also be made available through a similar partnership.

Microsoft's Windows operating system, on which its Media tools are built, has a massive reach. Industry estimates suggest 90 per cent of computers run on it.

Mr Gates said: "We're working with BSkyB … and they'll be setting up through our alliance a video on-demand capability … they've got over 8 million subscribers in the UK who will be able to do those downloads."

Microsoft has fiercely promoted its Media software over the years, a strategy which has led it into several high-profile legal wrangles. Its decision to promote its Windows Media Player by effectively giving it away for free led to charges that it was engaging in anti-competitive practices.

The European Union recently threatened the company with fines of £1.4 million a day for refusing to meet measures designed to help other companies compete.

Today’s announcement also underscores Sky’s determination to move online. In October, the company announced a £211 million takeover of Easynet, the broadband telecoms specialist. That deal will allow BSkyB to offer "triple-play" services - a combination of broadband, television and telephony - pitching it against BT as well as the newly-merged cable companies NTL and Telewest.

BSkyB chief executive James Murdoch said the Easynet deal reflected "the exciting opportunities that now exist to combine quality entertainment with significant high-speed connections." Sky has said that nearly half of its satellite TV customers have broadband access and most of these will be reviewing their internet service provider over the next few years.

Mr Gates also announced plans for an external high-definition DVD drive for its Xbox 360 device, which Microsoft is promoting as a home entertainment system as well as a games console.

BSkyB shares were up 4p at 499p in afternoon trade. To track the stock click here.

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