Web Informant #254, 13 July 2001:
Microsoft vs. Time Warner, and the coming battle for entertainment content

"Sometimes you have to lose yourself before you can find anything."
-- "Lewis" in Deliverance (1972)

Over my vacation, I caught the movie Deliverance: I thought it would be a good movie to see after a long hiking trip in the mountains. For those of you unfamiliar with the movie, it chronicles a canoe trip that goes awry with four middle-aged guys through the deep South. Of course, when I first saw it the notion of middle-aged was a foreign concept to me. (I don't want to go further on this thought, believe me!)

The line spoken by Burt Reynolds early in the film is a good touchstone for what we are going through with the Internet, Microsoft, and the future of the web. Many of us are still trying to find where the web is going, and I am not just talking about typing in the right terms in Google. And I do think you have to go down quite a few blind alleys or backwaters or whatever the right geographical metaphor is before you can understand the right direction you want to be heading towards.

For those of you that were on vacation like me, Microsoft has made some minor noises about eliminating the browser icon from subsequent versions of Windows. But this isn't really much more than an empty gesture: at this juncture, browsing technology is firmly embedded so deeply into Windows that you couldn't remove it without crashing your system. And anyway, who would want to? We all use Internet Explorer anyway, and have learned to live with its quirks (Active X) and oddities (a space in a URL brings up an error, a space in the same window when I am browsing my hard disk is acceptable). Who cares about Netscape's browser? It is so Novell, so 1994. You might as well bring back DOS.

But Netscape has been transformed into what is now called AOL Time Warner, and it is a formidable competitor to Microsoft. Oddly, while there are some people who work for this company that are still creating browser software, the heart and soul of the company has almost nothing to do with simple HTML and web browsing. Microsoft and AOL are fighting a far more difficult battle, the battle for content, for what we will watch and be entertained by. This is the holy grail for the future of the Internet. Everything that matters goes beyond plain text pages and a few cute tricks like boldface and blue underlined links. It is about renting videos, going to the movies, watching the Sopranos and West Wing, sending IMs and playing games. Here is the where the real money is. Here is where we spend most of our time (as sad as I am to admit it). Here is where we are truly passionate about our gear: I may know the clock speed of my Pentium, but the screen size of my TV is in another league entirely.

So what has Microsoft done, and what are planning? Take a look at the following, and see if you can determine a trend:

• With Windows 2000, Me, and when XP ever ships this fall, Windows Media Player is now an integral part of the package. This allows you to organize your music and play video streams. More and more people are converting their CD collection into MP3s, and downloading music (with or without Napster's help).
• A new technology called Smart Tags has come and gone that allows Microsoft to control a meta-directory of sites and URLs. While this has disappeared from view, don't expect that Microsoft won't figure out a way to bring it back from the dead.
• With various versions of Windows and IE, Microsoft has integrated its IM client (Messenger) into the mix. Of course, zillions more people use AOL IM, but eventually Microsoft will figure out something that will motivate people to use their system before long.
• Microsoft has inked deals with various music publishers and will start charging for downloading music sometime this summer, according to press reports this week.
• Windows XP contains software that allows you to sort through your digital photos and organize simple movies. While it isn't even close to the capabilities of what Apple's iMovie can do, it is the beginning of capturing these tasks into the operating system.
• Microsoft's Passport authentication and payment technologies are still pretty primitive, but they will improve over time and begin to serve as the mechanism for how Microsoft can collect online revenues directly from consumers.

Taken together, this represents a far more dangerous monopoly than a mere browser inside the operating system Trojan Horse could ever be. Microsoft is after all of our entertainment technologies. It is an assault on so many fronts that it is easy to lose track.

In 1993, convergence between computing and the entertainment industries was a big deal. I wrote a column for Infoworld entitled, "Why convergence won't happen," and ended it by saying:

"Corporate networks will be safe from Nintendo-attached nodes for a long time, rest easy. But let's call a spade a spade: the coming covergence will be less animated spreadsheets and more animated entertainment. Time Warner, Spielberg, and others will benefit. AT&T and Microsoft won't."

Now I am not so sure. And like Lewis, I think we all have to get a little lost first.

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David Strom
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