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Microsoft and Entertainment on Demand

2003 is winding down and it's time to report in.  Some great things are happening that will impact the independent entertainment community.

Microsoft, with its late-2003 version of XP, embraces the TiVo™-like functions of a personal video recorder (PVR) and makes the ability to record programs using a hard drive a "must have" feature.  Of course TiVo and SonicBlue have licensed similar technology to manufacturers of electronic boxes, some with other video functions, like DVD, VHS and CD playing.  But, Microsoft, by insisting that the new operating system be sold only with new computers, insures that the minimum computer configuration is present.  This includes a fast hard drive and a TV tuner card, along with the usual peripherals.

While the TV tuner card is one way to catch a show, another of course is over high-speed Internet.  Like those programs of (The Surfview Guide™),  entertainment programs can be sent via streaming  or burst IP technologies.  

Microsoft, by helping Comcast with the financing of the AT&T cable assets, received Comcast's OK to control their interactive programming guide (IPG) into millions of homes.  From their MSN-style IPG, (and don't rule out their merger with Gemstar or TVGateway for more IPG connections), they will be able to bypass the MSO (in this case Comcast) and deliver video on demand (VOD) content to users of standard set top boxes (STBs).

Some of the Microsoft MSN IPG served recipents will have STBs and others will have computers running the new Media Center XP operating system or TiVos and boxes made under license with SonicBlue or TiVo.  But, the bottom line is, is that consumers will be able to order what they want, when then want to see it - from an Internet wide group of distributors - a much larger selection than the short list of movies currently available on demand shown at set times by the cable provider.

So, how does this affect the independent entertainment community.  Well, for watchers, having more control of what's seen when is an obvious benefit.  And of course, there will be a huge leap forward in selection, the variety of product offered for pay-per-view.  This variety of selection is the same benefit for content producers.  Guides like the The Surfview Guide™ will point to an unlimited number of entertainment providers. With their content available over the Web, as long as they have a payment mechanism in place, their content can be ordered by not just people with computers, but by millions of people who have the standard STBs offered by companies like Motorola and Scientific Atlanta. In essence, the virtual Internet-style art house theater number of seats, just shot-up by millions.  What was once before, just people with computers and high-speed Internet connections, is now a much much bigger audience, having expanded to include millions of cable subscribers.  That's great news! More people to order your fare.

With Microsoft's Media Player becoming ubiquitous, existing in STBs, PCs, PDAs, and probably phones soon, they will be able to handle the playback of any type of media.  (RealNetworks is a formidable player, not to be ruled out too quickly.  And let's not forget Apple's QuickTime, too.)   What's really happening, is that Microsoft is attempting to do away with the browser altogether and to, using MPEG-4's ability to handle imbedded html links, turn the graphical user interface (GUI) into a Media Player.  Yes, the browser of the future will be a Media Player with a customizable "skin", allowing an area for media playback, controls for the latter, and an area for display of web content, along with an area for interactivity.  It will run on any device.  Wow.

Microsoft, with their announced "Corona" VOD capability, will have the ability to stream (actually burst) digital content to whomever orders it on any device capable of running Microsoft's Media Player software.

Now that the Federal government is off Microsoft's back, they can fill in the equation - the e-commerce aspect of ordering media content and money changing hands.  

Peter Gabriel has been leading the way, leveraging Microsoft's digital rights management technology, to control piracy and access issues.  The mechanism seems pragmatic and if fully endorsed, a great logjam breaker, making sure copyright protections allow for people to enjoy the fruits of their labor (or just making a living.)

Companies like Concurrent, Seachange and EMC are bound to do quite well, once the VOD explosion occurs. To allow everything possible to be available for download quickly, will require lots and lots of hard drives and servers. Many many boats will rise. 

These are exciting times.  To have a way to exhibit your content to a vast Web audience will mean that more entertainment producers will have an audience for their wares.  The studio and network systems of distribution will be "complemented" - not replaced.  After all, many of the Surfview Guide ™  participants are the studios - already set-up to handle online exhibition., and are just a few of many many.

Lots of payment schemes will work.  PayPal, for one, stands to do well.  There are a bunch of systems already employed by the hundreds of entertainment vendors found on the  The Surfview Guide™ .   

The most important breakthrough, by far, is the number of seats expanded by allowing consumers to enjoy entertainment on demand - using their already existing STB box,  provided by their cable company - (and by law, available off-the-shelf at local electronics stores).

That Microsoft has enhanced the PC to be a PVR STB is great, too.

If you live in a Comcast area, you may be the first to notice the MSN-style IPG, replacing your TVGuide(TM) Gemstar one.

But, don't rule Gemstar and TVGateway out.  They too, (following Microsoft's lead), will turn their IPGs into more than just scrolling lists of what's on and previews.  Their interactivity will get boosted.  And once that happens, look for interactive TV to take off.   Many many boats will rise, including OpenTV, Liberate, Wink, WorldGate and Liberty Media (owner of a few of these.)

These are exciting times.  Microsoft, love 'em or hate 'em, they are raising the bar and pushing new standards that will be of great benefit to consumers and producers.  Increasing the numbers of potential customers for independent fare is truly exciting.

Join the party. Go out to your local electronics store and check out the new models that use the Microsoft XP Media Center (previously known as "Freestyle") operating system.  Get familiar with TiVo.  Learn what's possible and then dive in.  The economy needs a new fun set of widgets, consumers - more selection of entertainment on demand, and producers - more paying customers.   It's all good!  Well, some of it.


James E. Tessier editor

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