News

Microsoft Vying for Title of "King of All Media" (18/3/2004)

While Howard Stern may call himself the "King of All Media", Microsoft is fast becoming a significant player in all forms of digital content distribution, reports In-Stat/MDR (http://www.instat.com). Whether it's broadcast, Internet, packaged goods such as DVDs, or Video on Demand, Microsoft's push into digital media has bought the company a seat at the table when it comes to discussing the direction of these various content channels, according to the high-tech market research firm.

"The move from operating system vendor to media software giant has been a long time in coming," says Mike Wolf, Principal Analyst with In-Stat/MDR's new Consumer Media and Content Group. "From its investment in Movielink, plans for online music, Xbox, the Windows Media Series 9 platform for delivering content over any network, its Digital Rights Management offerings, and Media Center PC initiatives, Microsoft is increasingly doing business with those who control the creation and delivery of content." Wolf believes that the company's goal is not to own a huge media company, as recent speculation about a possible Microsoft bid for Disney would portend, "but instead to have its hand in as many pies as possible through its end-to-end tools. The company will continue to make itself relevant, and hence its core products, such as the Windows operating system, by adding value."

The commoditization of the PC business and the lack of compelling reasons for consumers to upgrade their PCs has pushed Microsoft to make the PC more than just a productivity center. Now Microsoft and the PC industry are positioning the computer as the central hub for the digital lifestyle, an electronic storage chest of entertainment content and photos. However, the move to position itself at the center of the digital media revolution will not be an easy one. "There remains a number of obstacles to Microsoft's push into digital content," says Wolf. "Content and consumer electronics companies are wary of becoming too dependent on Microsoft and are working to keep alternative technologies alive." Government intervention will be another hurdle, as exemplified by the recent decision by a European Union advisory panel to punish the company and potentially require Microsoft to extract Windows Media from the operating system.

The report, "The King of All Media?: An Analysis of Microsoft's Content Strategy" (#IN0401556CM),is the first report published in In-Stat/MDR's new Consumer Media and Content service. This service provides insight and advice to content companies and their partners on how existing models will be impacted by convergence technologies. The report examines the different motivating factors for Microsoft to be involved in the content market, how its involvement will impact content players and its competitors, and how content companies should engage with Microsoft as its presence continues to grow.

www.instat.com