Microsoft Seeks Role for Media Software

Venturing into the heart of Hollywood, Microsoft Corp. on Wednesday unveiled the preliminary version of its latest software for watching movies and listening to music, hoping to persuade consumers and entertainment companies to give Windows-based computers a starring role in the future of entertainment.

Microsoft Chairman Bill Gates was joined by a handful of entertainment luminaries who endorsed the more than 120 improvements to the company’s Windows Media technologies.

But absent from the event at the Hollywood & Highland complex were major studio executives who ultimately will decide how many of their movies and television shows will be delivered digitally by Microsoft’s software.

With Windows Media Series 9, Microsoft is aiming at two different but equally important groups of customers. It not only wants consumers to use the Windows Media Player to organize and control their music and video files but also hopes entertainment companies will use Windows Media software to deliver their products digitally--either via the Internet or on disc.

Microsoft faces fierce competition, particularly from RealNetworks Inc. and Apple Computer Inc. But it also must overcome the reluctance of major entertainment companies to embrace the Internet as a distribution pipeline.

On hand to endorse Microsoft’s technology were “Titanic” director James Cameron, former Beatles producer George Martin and rapper-actor LL Cool J--respected artists all but none of them in charge of a major studio or record label. In an interview, Gates said the company invited leading entertainment creators, not studio heads, because “those would be the best ones to speak out about what our technology’s going to let them do.”

“The time to bring the business people in,” he added, “is when you have the services built.”

Those services are few and far between, particularly when it comes to full-length video. Although five of the seven major Hollywood studios plan to test the waters with a downloadable movie service this year, the Movielink venture, like the handful of independent online movie outlets, probably would offer only a tiny fraction of what’s in the studios’ vaults.

Studio executives and other industry representatives say the main holdups are the limited picture quality of online video and the risk of digital piracy.

Although Microsoft’s new software adds the ability to scramble live broadcasts over the Internet, it doesn’t seem to answer two of the studios’ key concerns: the proliferation of piracy on Internet file-sharing networks and the continuing ability to turn scrambled media files into pirated analog copies.

Still, on both security and quality fronts, Microsoft representatives say, the new Windows Media technology has made important improvements. And Gates warned that the time has come to start competing with online pirates.

“Whether it’s the studio-backed efforts like Movielink or the independents like CinemaNow or Intertainer, we are very strongly telling the studios they’ve got to make those things successful, in big numbers,” he said. “They can’t sit back and say, ‘DVDs are doing well, why do we care?’ ... They’re creating the same awful common sense for movies that for many young people exists for music, which is you steal the bits.

“In the case of the music industry, I don’t think there’s anyone in that industry who wouldn’t say, ‘Darn, we were late. We should have done [a legitimate online service] years ago, or ... version one should have been perhaps more flexible than it was.’ ”

The new version of the Windows Media Player includes many powerful customization features, among them the ability to speed or slow playback without changing the pitch of the music or voices.

It also integrates four fee-based services: video on demand from Intertainer and CinemaNow and music from Pressplay and FullAudio.

The latest Windows Media technologies also boast the ability to deliver surround sound through the Internet, a feature that rocker Peter Gabriel plans to use Sept. 25 on a downloadable version of his new album, “Up.”

And Windows Media can compress a full-length high-definition video onto a single DVD, a technique BMW of North America plans to use this month when it distributes Artisan Entertainment’s “Standing in the Shadows of Motown” to selected theaters with digital projectors.

According to a recent survey by ComScore Media Metrix, Microsoft and Seattle-based RealNetworks are neck and neck in the battle for consumers. But Real has lined up more deals with entertainment and media companies, including exclusive deals with major league baseball and NASCAR.

“We think it’s great that they’ve improved their plumbing,” RealNetworks’ chief executive, Rob Glaser, said of Microsoft’s new technology, but he added that consumers care most about being able to play the files they find online. Real’s player can handle far more formats than Microsoft’s.