(somewhat off-topic) Microsoft music..............
news.com
Microsoft hears the sound of music
By Beth Lipton
Staff Writer, CNET News.com
May 14, 1999, 1:00 p.m. PT
news analysis The online music business may have undergone a sea change this
week with the marketing agreement between Sony and Microsoft.
The deal seems fairly innocuous on its face: The two said they agreed to work together
essentially to cross-promote each other's Net properties and online media events. When
the new version of the Windows Media Player is released this summer, listeners will be
able to download the player or upgrade the old one to hear the music Sony is committing
to the deal.
But few things are so simple where Microsoft is involved, especially when the stakes are
so high. Given the Redmond empire's history, the deal could reflect Microsoft's initial public
play toward eventually dominating the rapidly growing business of music downloads.
"With the labels all competing against each other, only Microsoft [could] end up being the
winner because they could shave a few pennies off every use of their technology," said
Sajai Krishnan, a principal in the communications and technology practice of Booz, Allen
& Hamilton. However, he added, "they have the additional task of convincing [music]
executives that 'we will all make money.'"
Microsoft's recent investments in cable companies underscore its intention to own a large
part of the wider pipelines needed to deliver music, video, and other features through the
Internet. Moreover, its relentless push into TV set-top boxes and handheld computers with
the Windows CE operating system show how determined it is to control the boot-up
screen on whatever device consumers are using to get online.
"Microsoft's goal is to offer the consumer as much content as possible," a company
spokesperson said. "They see the tremendous consumer demand for music and they say,
'How can we best meet that consumer demand?'"
The scenarios are not difficult to envision: Imagine a consumer whose first experience with
the Internet is through a cable-connected TV box with high-speed Internet access. The
newbie turns on the box and gets a desktop-like screen with icons
representing television, the Web, telephony, and music. A click on the
music button delivers songs directly or downloads them for another
device, eventually appearing on a regular cable bill, similar to a
pay-per-view movie. Regardless, the result is easy, seamless access to
desirable content--all courtesy of Microsoft technology used somewhere along the chain of
delivery.
Such a strategy would fall in line with Microsoft's business patterns, which have been
highlighted in the browser market through the massive antitrust action brought by the
Justice Department and 19 states. Whereas a Windows consumer would have to seek out
and download a browser by Netscape Communications, one click on rival Internet
Explorer's icon on the Microsoft desktop screen brings the Net immediately home.
Monopolistic concerns notwithstanding, it seems inevitable that Microsoft will try to
dominate the Net music delivery space, now that it is beginning to clear an important
barrier in an area that it does not control: content.
Content is key
Sony has not yet said which artists' music will be available when the new Windows Media
Player is released this summer. The company has said it will offer music that is already
commercially available and will not circumvent traditional retail channels.
Mark Hardie, senior analyst at Forrester Research, said Sony probably isn't sure yet how
committed it wants to be to Microsoft and its technology, so it isn't willing to risk upsetting
retailers and offering anything exclusively.
"Who the artists are will determine how serious Sony is," Hardie said, adding that if Sony
lets Microsoft deliver songs that are on the charts, it will send a clear message that it is
committed. If the new Windows Media Player comes out with anything less, he said, "it
was all smoke."
Hardie and Fred Ehrlich, senior vice president and general manager of Sony Music
Entertainment, emphasized that the deal between the two companies is not exclusive.
That is significant because Sony has developed its own Net music delivery technology,
dubbed "Super MagicGate," and is participating with IBM on its Madison Project, which
involves consumer trials of IBM's Electronic Music Management System among
subscribers to the high-speed Road Runner cable Net service in San Diego.
So in essence, Sony has nothing to lose by signing on with Microsoft. "We are
investigating a variety of ways to deliver music to the public," Ehrlich wrote in an email to
CNET News.com.
What seemed to drive the major record labels to keep Microsoft at arm's length was an
apparent reluctance to truly support the Recording Industry Association of America's
project to create a specification for copyright-protected music downloads, the Secure
Digital Music Initiative.
"We were very pleased when Microsoft decided to support the music industry's position on
copy protection and to work actively to fulfill SDMI's guidelines," Ehrlich wrote. "We always
felt that Microsoft's technology was good but that they needed to have a stronger position
relating to copy protection."
The issue is somewhat ironic, considering Microsoft's own troubles with software piracy
exascerbated on the Net.
The "leader's curse"
With all the major labels--BMG, EMI, Sony Music, Universal Music Group, and
Warner Bros. Music--backing the Madison Project and Universal planning its own
technology through a partnership with InterTrust Technologies, it is unclear how
much support Microsoft's technology will draw. As Hardie pointed out, it could
depend largely on the fate of the Sony deal.
For now, IBM's Madison Project is out in front on that score, as it has all the major
labels behind it. But "just because IBM looks like it's in the lead right now doesn't
mean it will prevail," Krishnan said. "These standards issues are always very
complicated."
Already, "a ton" of independent record labels said they would back Microsoft's
technology when the beta version was released last month, the Microsoft
spokesperson said, including Restless Records and DreamWorks Records.
But Microsoft's reputation could be its own worst enemy in this endeavor. "Everyone
gets a little nervous when Microsoft it around--it's the leader's curse," Krishnan said.
A relationship with Microsoft "is not something the labels are going to walk into
blindfolded."
Music must be portable
Forrester's Hardie pointed out that the listening experience has to be seamless,
because that is what the mass market is accustomed to today with radios, stereos,
and portable devices such as Sony's Walkman.
Already, Casio has said it will support Microsoft's technology in its E100 device, the
Microsoft spokesperson said, adding that "Diamond is looking into it." Casio calls
E100 a "palm-size multimedia PC" that employs the Windows CE operating
system.
Microsoft has to "make its technology as invisible as possible," Hardie said. To that
end, the best-case scenario for Microsoft would be all content available in its format,
whether it be on a personal computer, handheld device, TV box, or anything else.
"At the end of the day, what they have to work on is making the Windows Media
Player go away," Hardie said. "People's only consideration has to be what music
they want to listen to, not whether they have the right technology." |
