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IP: *Everybody* is getting into the act!
From: David Farber <dave () farber net>
Date: Sat, 01 Sep 2001 00:48:58 -0400
From: "Janos Gereben" <janos451 () earthlink net> EU fires another salvo at Microsoft Dawn Hayes - www.the451.com London - It's 1995 all over again. Microsoft's practice of integrating Windows Media Player (WMP) software into its Windows operating system has drawn the ire of regulators, who continue to shadow the company's every move. On Thursday, the European Commission's competition directorate opened an investigation into whether Microsoft's integration strategy with WMP contravenes competition rules. Windows XP is claimed to be easier for consumers to use because of its integration of more formerly discrete products. With the Windows XP operating system set for release in October, the European Commission has sent Microsoft a statement of objection about the integration of WMP, according to the Wall Street Journal. How much detriment that integration will bring to companies in markets ranging from digital music and streaming video to digital rights management is the question regulators are looking into. Once again, AOL will be leading the lobbying efforts against Microsoft, arguing that it is still using its dominant position in the operating system market to promote its other software products. AOL was the main opponent in 1995 to Microsoft's attempts to bundle MSN with Windows, and once more it has the most at stake in lobbying to get a brick wall erected between Microsoft's streaming media software and its operating software. Microsoft and AOL Time Warner are vying to become the de facto intermediary between end users and the Internet with their respective universes of software and services. AOL's preferred media software supplier is RealNetworks, which is Microsoft's main rival in the streaming media market. AOL and RealNetworks are in cahoots on MusicNet, an attempt to create a Napster-like subscription service. Not surprisingly, Microsoft is batting for the other side - a rival music joint venture between Sony and Universal, dubbed pressplay. Could bundling in WMP with XP tilt the market for online music in favor of pressplay? It's one of the possibilities the EC will ponder. And don't forget that the enterprise market is expected to embrace streaming media applications sooner than the consumer market. Bundling WMP with Microsoft's server software could be key to gaining share in this market against Real's server software, which is an extra-cost item that IT departments might well forgo in a down economic climate. An important component of both the retail and enterprise streaming media markets is digital rights management technology. WMP has DRM capabilities built-in. Here too, the EC may be looking at whether the company can gain an unfair advantage over companies like InterTrust, SealedMedia and the like. Apart from bundling WMP, Microsoft's development of identification services may also draw attention. Services such as Microsoft's Passport allow customers to log onto multiple websites in one easy step. In return, those websites and network operators are able to track customers more closely, since their personal information, including email address, phone number and potentially their credit card information, is held in a central database. In addition to its identification service, Microsoft hopes to host its Web-oriented transaction service architecture, Hailstorm, on its own network of data center servers, giving it control over access to customer information. AOL is developing its own counterpart identification and transaction service. For all the blustering between AOL, Real and Microsoft, the media player market is still in the formative stages. The rollout of broadband networks has been slower than expected, which means that streaming media is little more than a postage stamp-sized video experience on the desktop right now. Still, it is a cornerstone of both Microsoft's and AOL Time Warner's Internet strategies because it is regarded as a key technology that will keep viewers tuned into their services. Analysts were largely unconcerned about the European regulator's move. Lehman Brothers said Microsoft can easily address the issue by making Windows Media Player an add/remove option. Also, Microsoft has been bundling WMP with its operating system for years, but has yet to overtake rival RealNetworks' leadership position. According to the latest figures from Jupiter MMXI, as of June, RealNetworks' player software had 32.7 million home users, while Windows Media Player had 22.1 million and Apple's QuickTime had 7.8 million. ~~~~~~~~~~~~~~~~ Janos Gereben/SF janos451 () earthlink net
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