By Tim Landgrave

Events at the recent National Association of Broadcasters (NAB) meeting in Las Vegas signal a change in how the major media players from the computer industry will interact with major players from the broadcasting industry. And these waves won’t just be felt by companies in these industries. The changes will ripple down to every company and individual seeking to create, consume, sell, or distribute media, whether developed internally or acquired for internal use.

If your company falls into one of these categories—and whose doesn’t—the recent changes in the media marketplace should be of great interest to you. Let’s look at these changes and how they’ll affect corporations over the next couple of years and beyond.

RealPlayer vs. Windows Media
Although not given the press coverage of other major industry battles (such as Sun, Novell, Netscape, or Oracle vs. Microsoft), the battle between RealPlayer and Windows Media has been one of the nastier ones. Rob Glaser, the president and founder of RealNetworks, is a former Microsoft executive who knew how to use his insider and industry knowledge to build a formidable competitor for Microsoft. In the Internet heyday, RealNetworks became the dominant provider of streaming media with its RealMedia server solution and the RealMedia player.

At last year’s NAB, RealNetworks and Microsoft’s Media booths were each the size of a city block and were positioned directly across from each other. The battle for streaming media dominance had become a hot one since Microsoft’s Media Player 7 had finally caught up with the RealMedia player in performance, and Microsoft began including server-based Windows Media Streaming services with every copy of Windows 2000 to compete with RealNetworks servers.

But RealNetworks still had a commanding lead over Microsoft in the number of sites that had adopted the RealMedia servers and player as their standard. Big companies like pledged allegiance to RealMedia exclusively, while other large companies offered a large selection content using RealMedia format and a smaller selection of Windows Media content. RealNetworks had a seemingly insurmountable lead in the market.

A funny thing happened on the way to the consumer market
At this year’s NAB, you could visit the same huge Microsoft booth. But you had to look hard to see the tiny RealNetworks booth at the show. What happened? It was a combination of two factors that changed the face of streaming media forever. The first factor was Real’s decision not to challenge Microsoft in a battle that it had repeatedly demonstrated it could win. Rather than going after Microsoft directly by trying to compete on features and price with its RealMedia servers and player against the Windows Media juggernaut, it chose wisely to take its lead in content and extend it.

Rather than trying to become a generic streaming service software company, Real has moved to a streaming content publishing niche that’s being driven by its RealOne portal. It has secured deals with major content providers (such as the NBA, Major League Baseball, CNN, and FoxSportsNet) that have allowed it to become an aggregator of fee-based streaming content services. And Real has modified its RealPlayer software to play all current media formats, including the Windows Media format (WMA).

The second factor was Microsoft’s decision to focus on signing up any ISV, OEM, or other hardware or software provider that would use Windows Media as its encoding or decoding standard. These providers told Microsoft it needed to add some compelling features to Windows Media that would encourage them to adopt a proprietary standard from Microsoft rather than using industry standards like MP3 for audio and MP4 for video.

Microsoft responded with compression technology that allows digital audio files of CD quality using WMA to be the same size as the smaller radio quality files encoded with MP3. It added digital rights management (DRM) capabilities that allow publishers and artists to protect their content, but still allow consumers to use the content within their rights. For example, Microsoft is now working with music CD distributors on a project that allows copy-protected CDs to play in normal CD players, but provides WMA versions of the music files on the CD, which computer users can play on their PCs or move to portable players that support the WMA DRM standards.

For video enthusiasts, Microsoft used its Corona technology in Windows Media 8 to allow consumers with 100K to 300K of bandwidth to view DVD-quality video on their PCs. Moreover, these same video files (or others produced with the Windows Media encoder) can be placed on CDs or DVDs for external distribution or on local servers for internal viewing. It’s this capability that will be most interesting to corporations going forward.

Your Company Broadcasting Corp. (YBC)
If you’ve standardized on the latest version of the Microsoft product suite, you already have all of the tools you need to create, store, distribute, and stream your company’s digital media assets. You can download the Windows Media encoder and either convert existing content or capture new content. Windows XP includes Windows Movie Maker, which allows you to edit this content and produce files capable of being streamed, burned, or downloaded. The Windows Media Server included in Windows 2000 provides the facility to host and distribute streaming content from your own server farm. If you don’t want to consume your own local bandwidth for media streaming, you can partner with innovative new companies, such as Next-Cast, which have built publishing tools that make it easy and inexpensive to host and stream video content.

Microsoft’s recent advances in media technology, combined with its distribution model, which puts those tools in everyone’s hands, will turn digital media production and distribution into a cottage industry just as Apple popularized desktop publishing with the Mac and the laser printer. Forward-thinking companies will use these media capabilities to distinguish themselves. It’s now economically feasible to produce and distribute video sales materials, training videos, product demos, and other rich media that will play not only on desktop PCs but on consumer DVD players. And although Microsoft is leading the media charge, it’s certainly not the only company driving media standards into corporate America.