Microsoft Forms New Entertainment Convergence Group

Microsoft has formed a new Media/Entertainment & Technology Convergence Group, a move analysts say is calculated to build trust between the Redmond, Washington, technology giant and the media and entertainment industries.

“Clearly Microsoft is trying to reach out to the companies that own rights to digital media because having that media compatible with its technology is critical to ensuring its adoption,” Ross Rubin, director for industry analysis for the The NPD Group in New York City told TechNewsWorld.

To head up the new group, Microsoft is bringing in some Hollywood brass: Blair Westlake, former chairman of the Universal Television & Networks Group.

“They’ve brought in a high-level entertainment exec who they think can make the deals that can secure the content for initially, their music service, but, more generally, to get support for Microsoft as a technology platform for digital audio and video,” Rob Helm, director of research for Directions on Microsoft in Kirkland, Washington, told TechNewsWorld.

Inside Player

“They’re bringing someone on board to speak to the entertainment industry in a language that they understand — an insider who can speak to insiders — and to provide a perspective back into Microsoft about what things are important to that industry,” said Rob Enderle, principal analyst for the Enderle Group in San Jose, California.

“He’s going to be a bidirectional interface,” he added.

When asked via e-mail what the new group’s role would be in the expected roll out of a music service later this year, Communications Manager Jodie Cadieux responded, “While there is nothing specific to report at this time, you can expect that the Media/Entertainment and Technology Convergence Group will be working very closely with all efforts related to the media and entertainment industry.”

Enderle contends that the group is a tacit admission by Microsoft that it needs to improve its coordination efforts in the digital entertainment area.

“They have a lot of people working on these media concepts, technologies and products and they’re not particularly well integrated,” he said. “As a result, that’s made it difficult for the industry to understand where Microsoft is going.”

Set Free the Content

Not only does the formation of this group enable Microsoft to clarify its external message, he noted, but it gives the industry a way back in to tell Microsoft if its on the wrong track with any of its initiatives.

Helm maintained that the number one job for the new group will be to “set free the content.”

He explained that Microsoft believes that digital audio and video could kick off a new wave of PC sales and upgrades, but right now the content just isn’t there to jump start the market.

“The reason the content isn’t there is Digital Rights Management (DRM) or copy protection,” he said. “There’s half a dozen different technologies out there to do it and until there’s one that all the content owners trust, it’s going to be difficult to get content that people can play on their PCs.”

Trust has never been an issue between content providers and Microsoft, according to Cadieux.

Countering Technophobia

“Microsoft has had positive working relationships with the media and entertainment and consumer electronics industries for years,” the spokesperson said. “Microsoft recognizes greater cross-industry collaboration between the media and entertainment, technology and consumer electronics industries will result in long-term success for all involved and next generation entertainment experiences for consumers.”

Positive relationship or not, content providers harbor serious anxiety about what technology companies are peddling, according to The NPD Group’s Rubin.

“There’s a lot of fear among rights owners that digital technologies have the potential to destroy their businesses,” he noted. “”What’s going to ease their fears is profit.”

What’s ironic, he added, is that “throughout the long history of mistrust between these industries and technology, the industries have profited from every wave of new technology adoption.”

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