Gamasutra details how the rumors fit into Microsoft's overall strategy.
According to the article, an Xbox TV serves many purposes. As a natural evolution of the lower priced offerings at launch for the Xbox 360, PS3, and Wii U, the Xbox TV may be a friendly alternative to the Durango, which may itself come with a severe price tag.
At the same time, Microsoft could take their Xbox 360 entertainment offering experience and present a product to compete against Apple TV that focuses on "core entertainment services."
Finally, as a little brother to the Xbox, Xbox TV could also ready Microsoft to further make inroads into the casual gaming market.
One item noted by the article points out how Microsoft is able to utilize Xbox Live to understand exactly how its customers make use of their time in terms of the company's offereings.