For example, with the new technology a user could rent several movies for a long trip, download them onto a portable player and then watch the movies until the rental expires a month later. A user also could rent songs for a set period and play them back on a portable player.
"At the moment the current subscription models that are out there are so hobbled by the fact that they cannot be taken away from the computer," Microsoft spokesman Jason Reindorp said.
The new technology will work only with newly developed portable players which are expected to hit the market in the next two to three months.
Companies including Disney have said they are interested in using the new technology for their content.