Apple Video iPod Invites War with Microsoft - Microsoft Learns Humility
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It was only a few weeks after Apple started selling songs over the Internet, in April 2003, that Microsoft settled with AOL Time Warner over the egregiously monopolistic behavior that the software giant engaged in to crush Netscape. Interestingly, that settlement opened the door to more friendly relations between the two companies. From this relationship, Microsoft has been learning about the needs and concerns of content companies – information it needs if it is going to become a player in the home video business.
For example, copyright protection is a major issue in the movie business, just as it is in the music business. That’s why Microsoft’s settlement with Time Warner raised interest in the industry. It wasn’t for the $750 million that Microsoft agreed to pay; it was for agreeing to collaborate on ways to prevent the promiscuous, indiscriminate copying of video. Together, the two companies purchased a combined majority stake in ContentGuard, a firm with patents on anti-copying techniques.
Other content companies wanted a piece of the action. Microsoft has reportedly been in negotiations with Disney – the same Disney that is supposedly negotiating with Apple – and News Corp. as well as other major players in the industry. These leaders are seeing a new Microsoft, one that realizes it cannot dictate its own terms, but must fairly address the concerns of the companies with which it is negotiating. In the words of one anonymous media executive, “They’re trying to learn lessons from their failure on the music side, where Apple blew them out of the water.”
One example of Microsoft adapting to the studios is its hiring last summer of Blair Westlake, who has longtime experience with Universal as a home video and television executive. Westlake’s task was to handle the negotiations with Hollywood. His advocacy has made Microsoft “more cooperative,” according to Disney Executive Vice President Salil Mehta. Case in point: Microsoft is changing some of its policy positions in Washington. Formerly opposed to any laws that would require anti-copying technology, the company is willing to concede that some might be appropriate.
Next: What Kind of Copyright Protection? >>
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