Microsoft Forms New Group to Drive Global Strategies and Relationships With Media and Entertainment Industries

REDMOND, Wash., July 19, 2004 — Microsoft Corp. today announced the formation of a new group within the company to help focus efforts and further develop relationships with the media and entertainment industries. The newly formed group — Media/Entertainment & Technology Convergence Group — will consolidate and drive the company’s strategies for the digital convergence of home entertainment technologies, personal computing and media, particularly in the areas of business and market development, technical and IP policy, and industry-standards initiatives.

Blair Westlake, Corporate Vice President, Microsoft Media/Entertainment & Technology Convergence Group Click image for high-res version.

Blair Westlake, former chairman of the Universal Television & Networks Group, will join the company and head up the new group as corporate vice president. Under Westlake’s leadership, the Convergence Group will be responsible for ensuring that effective business relationships, technologies and policies are in place to meet the increasing consumer demand for access to high-quality audio/visual digital information, entertainment, news and sports programming via Windows®
Powered devices in the home.

“The creation of the Media/Entertainment & Technology Convergence Group and Blair Westlake’s appointment underscore Microsoft’s strong commitment to delivering cutting-edge products for the digital networked home and continuing to build mutually productive and profitable relationships with the media and entertainment industries,” said Steve Ballmer, CEO of Microsoft.

Microsoft also today announced it has expanded its strategic relationship with Lieberfarb & Associates LLC, a media, entertainment and technology consulting firm, to further support the strategic activities of the Media/Entertainment & Technology Convergence Group.

Consumer Trends Lead to Opportunities

Consumers continue to expand their usage of the personal computer as a digital entertainment device, embracing technologies such as broadband Internet and wireless home networking. Broadband Internet was used in 82 million households worldwide at the end of 2003, and by 2006 it is forecasted to exceed 200 million households. 1 At the same time, consumers have rapidly increased their consumption of entertainment and media content, spending $63 billion worldwide on DVD titles since the introduction of DVD. 2 Combined with the adoption of new digital entertainment devices such as flat-panel displays and portable media players, consumers will demand even greater convenience and choice in their ever-increasing digitally networked homes — many of which will have personal computers as the entertainment “hub.”

Success in this new media landscape requires a greater urgency for cross-industry collaboration. The Media/Entertainment & Technology Convergence Group will develop win-win strategies for consumers, Microsoft and partners in the media and entertainment, consumer electronics, and IT industries to fully capitalize on these new opportunities.

Role of Public Policy and Standards

Due to the risks posed to all intellectual property businesses by the continued threat of digital piracy, the Media/Entertainment & Technology Convergence Group will also drive Microsoft’s contribution to worldwide industry standards and technical and IP public policy — including legislative and regulatory engagements — related to content-protection technologies, digital rights management, media format standards and related technologies. Partnering with media and entertainment companies as well as with regulatory and standards bodies will ensure that consumers can get access to high-quality digital content while preserving the business models needed to support ongoing content creation.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

1 PricewaterhouseCoopers Global Entertainment & Media Outlook, 2004–2008

2 Screen Digest

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