The Digital Media Revolution

SAN JOSE, Calif., Dec. 12, 2000 — One year ago, Bill Gates gave the keynote address at Streaming Media West 1999 and sounded the call for the

PressPass: What are the defining characteristics of this next generation of digital media?

Poole: The first thing you’ll notice is the dramatically improved quality of digital audio and video with our new codecs. Today’s unveiling of our new Windows Media Audio and Video 8 technology is the result of our tremendous R & D focus and investment in this area. These innovations are creating richer digital media experiences at significantly lower bandwidths than was ever thought possible just a year ago.

Microsoft President and CEO Steve Ballmer watches as Will Poole, vice president of Microsoft’s Digital Media Division, unveils a new Kenwood/Microsoft MP3 digital music player, the first to store over 22 hours of high-quality music on a single CD.

The next defining characteristic is our relentless effort to improve the user experience in digital media in Windows. We demonstrated, for the first time, the digital media enhancements in the next version of our consumer operating system (codename
) that we will deliver next year. These will radically improve the way consumers experience and enjoy all aspects of digital media from music to videos and more.

Digital Media is also extending to a whole new class of devices where users soon will have ubiquitous access to digital media everywhere they go: home, work, in your car, on your cell phone, on the bike trail. Everywhere. You can see the beginnings of this now with digital media on portable music devices, new wireless PDAs like the Pocket PC, and in the new digital media receivers that allow me to play my Windows Media digital music anywhere in my home. It’s exciting to see the PC at the heart of making all this possible.

Finally, the industry now has a mature set of technologies that enable them to build viable businesses with digital media. We have invested heavily in our Windows Media technologies and it has never been clearer that they are the right tools right now for businesses building digital media solutions.

PressPass: Why should people care about digital media?

Poole: Digital media offers people three benefits: vast choice; immediate gratification via Internet delivery; and unprecedented flexibility and control over the media they want to experience. People will embrace digital media in different ways. You might download music from the Internet, or search the Web and find a movie you can stream or download and play through your TV. Today, you can also take your favorite songs with you on various portable devices — digital media is becoming accessible to everyone — any time, any place and from a multitude of devices. It’s exciting and it’s fun.

PressPass: What is Microsoft’s focus, or vision, for digital media?

Poole: Our efforts are focused in three areas: 1) transforming the media experience for consumers and businesses; 2) taking digital media everywhere — from the PC to any device; and 3) enabling our customers to succeed by offering technology that supports their business goals.

The first two go hand-in-hand. For consumers to embrace digital music, for example, it has to have the best qualities of a CD — great sound and portability. So part of our challenge has been to develop the highest fidelity technology for enjoying digital music at home, in your car or while you exercise. The same is true for video, where we are setting new quality standards for near-VHS and near-DVD experiences at the smallest file sizes and bandwidths available in the industry. Plus, we are coupling this quality innovation with sophisticated digital rights management technology for both audio and video distribution to really provide the foundation for viable digital media e-commerce.

These innovations are being embraced by the industry on multiple fronts. We are very focused on working with the consumer electronics industry, all the major music companies, online content providers and the movie industry. We’ve seen tremendous support for Window Media from all the major consumer electronics companies like Iomega, Sony, Compaq, SonicBlue Rio and Creative to name a few, because of its quality and security advantages. And this week, Microsoft and Kenwood are announcing a portable compact disc player, the first to support Windows Media, enabling consumers to enjoy 22 hours of recorded music on one CD. Microsoft this week is also announcing the availability of Windows Media Player 7 for the Pocket PC. This new player offers Pocket PC users the ability to download news clips, music videos and music from the Web, or take along their home movies made with Windows Movie Maker.

PressPass: How much better can the quality of digital media get?

Poole: Audio and video quality has come a long way in a remarkably short time, and Microsoft is leading the industry. The current version of Windows Media Audio lets you store twice as much CD-quality music on your PC or portable device as MP3. The new version we’re announcing today, Windows Media Audio 8, will nearly triple the amount of music you’ll be able to store.

For video, until today, digital media could offer near-VHS quality at 300-400 kbps and near-DVD at 750kbps. Windows Media Video 8, also announced today, makes significant improvements — delivering near-VHS quality at 250kbps and near-DVD quality at connections as low as 500kbps. This brings great video quality within reach of the millions of households with broadband connections today.

Prospects for the future are exciting. The innovations in Windows Media Audio and Video 8 come less than six months following our release of version 7 and yet are backwards compatible for over 200 million customers who are using existing versions of our player. With the best sound and vision engineers in the industry today working on the technology, expect future improvements to be even more exciting than those we unveiled today.

PressPass: Will commercial distribution of digital music on the Internet really take off?

Poole: Business models for Internet music are evolving on almost a daily basis. Services like Napster have certainly focused a lot of attention on what’s needed for artists and labels to survive, and we are working closely with them to help them tap the potential of the Internet.

Fundamentally, for commercial distribution via the Internet to succeed, the music industry has to offer people better value than they can get through services like Napster. It’s tough to compete against
but if you look closely at what you get from services like Napster there is a lot of room for improvement. Better sound quality, better selection and reliable downloads are just the beginning. For example, with Windows Media, you can package extra-value content beyond just the music: concert videos, meta-data, and interviews, live tracks and so on.

U2 premiered their new single “Beautiful Day” this way in October using Windows Media, and it was a tremendous success. A month before it was even available on MTV, fans saw U2’s new video and synchronized lyrics to help them learn the new song, as well as detailed Web information about the band and links to their official Web site. This kind of approach not only rewards consumers who download legally, but also creates a much richer experience than you could get on Napster. It even provides a connection between the artists and their fans.

PressPass: You mentioned customers and partners. What’s Microsoft’s strategy for building partnerships for digital media?

Poole: Microsoft’s goal has been to enable successful customers by providing superior technology that supports and extends their business models. The more we embrace this strategy with Windows Media, the more successful our partners are — whether they be content providers, Internet service vendors, consumer electronics makers or corporations using digital media in-house. For me, one of the most interesting things about digital media is the creativity it spawns. Entrepreneurs contact Microsoft every day with new ideas for digital media — 3D applications, electronic gaming, Internet greeting cards, and on and on. The technology is like the ultimate set of building blocks for a child: It will never get old.

PressPass: This is great for consumers, but businesses probably don’t want employees downloading music videos on their computers at work. Are there ways for businesses to use these advances in digital media?

Poole: It is really much more than music; it is about enabling businesses to enhance enterprise communications through corporate-wide broadcasts, online learning and more. When you think about the time and money that goes into training any new employee, you rapidly see that any training video at their fingertips would be immensely useful. The same goes for a company CEO who wants to address every employee simultaneously, or a company with offices around the world: digital media can connect people in a way that email and office memos never could. And the return on investment can be significant; several studies have shown these solutions can easily pay for themselves within one year in terms of cost savings for events and travel.

PressPass: How does digital media fit into Microsoft’s future plans?

Poole: A few months ago, we announced our vision for the next generation of computing called Microsoft .NET. Our mission with .NET stretches far beyond what PC users are doing today, to an era in which people everywhere can access all their entertainment and information any time, any place and from any device. Digital media is at the heart of many of our efforts company-wide to make .NET a reality. It’s already one of the most important areas of focus for Microsoft and will remain so, long-term. It is an exciting time to be in this industry — our technology will continue to transform the media experience, and I look forward to seeing how it will continue to improve people’s lives.

Related Posts