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THE MORNING BUZZ: NAB is Making Strange Bedfellows

9 Apr, 2002 By: Holly J. Wagner

Think of Las Vegas and – Quick! – what are the first three things that come to mind?

If you're like me, the answer is 1) gambling; 2) hasty marriages; and 3) glitzy display. So it's the pefect venue – and the perfect metaphor – for this year's National Association of Broadcasters (NAB) convention.

Indeed NAB, which has added a streaming media component to its annual trade show, is a lesson in convergence and strange bedfellows this year. Companies are taking gambles, forming alliances and showing off efforts at VOD like never before.

For the cable and satellite industry, VOD is the killer app. It's the one thing they must have to go to the next level and they're pushing hard to get it.

Whether or not they will ever make it is anyone's guess. Politics and greed factor heavily into the equation and there are new players on the field, namely the tech powerhouses that provide the programs and gear that make VOD technologically feasible. That means more people at the table carving up a pie that has grown little in recent years.

I've been speculating for months that the reason Microsoft made DVD an add-on to its Xbox game console and spurned the widely used media player programs is its intent, long range, to try to convert the world to a Windows Media Player (WMP) standard. Why build an MPEG compatible device if you think the world would rather (or can be persuaded to) make software compatible to your proprietary player? This might also explain why Microsoft made version 8 of WMP (the one bundled in the XP operating system) so it relays information to Microsoft about what DVDs and features users are watching. Call it stealth research.

More evidence emerged this week, as Microsoft showed up at the NAB show to court studios and broadcasters with its computerized delivery system. RealNetworks, which makes the competing RealPlayer software, is also a real player with its announcement of a content management suite the company claims will make it easy for content providers to go live on demand. A few have already signed up.

Convergence is the watchword and it's clear that cable and satellite companies view VOD as the bridge to ITV, the holy grail of targeted marketing. VOD is merely a means to an end, I think, a way to get consumers used to using the set-top to command responses. The real goal is to lure viewers to choose advertising, which is where those companies will rack up the big bucks.

Intel was on hand with a "Powering Digital Media" display that introduced a new peer-to-peer computing program touted to make some files inaccessible to the remote user. (In plain English that means users can file trade selectively, sharing family photos with Aunt Minnie while hiding illegal copies of movies in another part of the computer.)

Sony and Sun Microsystems announced partnering on a program to offer "integrated next generation AV/IT solutions, including video-on-demand and streaming media solutions for cable companies, telcos and broadcasters."

These companies are staples at Infoworld and CES, but this is really the first time the computer giants have made such a push at a broadcasting show. Clearly they have VOD in their crosshairs.

I've been warning, some say like Chicken Little, that if the VOD players ever get their stuff together, video retailers are in trouble. I predict there will be an industry shakeout before we reach that point, but retailers would be wise to consider that dates on that calendar are closer than they appear.

The convergence may seem a long way off, but the studios have all become part of media conglomerates which, in most cases, own substantial interests in cable, satellite and terrestrial-line video delivery systems. With the exception of Viacom and Blockbuster, the only link in the movie food chain they don't own and control already is video rental.

Is anyone else smelling what's on the menu at NAB?

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