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Tinseltown Upgrades to Silicon

^_____About Filter^_____ Filter looks at the day's top technology news through snapshots and analysis of what the world's media outlets are covering. Washingtonpost.com's new Mon.-Fri. feature is penned by technology reporter Cynthia L. Webb. If a technology story breaks, a company falters or triumphs, or there's a new trend in technology, Filter wants you to know about it.

^_____Filter Archive^_____

• Cisco's Job Shocker (washingtonpost.com, May 12, 2004)
• Xbox Masters the Electronic Arts (washingtonpost.com, May 11, 2004)
• Going Public: Everybody's Doing It (washingtonpost.com, May 10, 2004)
• Get Ready for Some Hand-to-Hand Combat (washingtonpost.com, May 7, 2004)
• Dark Side of the Tune? (washingtonpost.com, May 6, 2004)
• More Past Issues

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By Cynthia L. Webb
washingtonpost.com Staff Writer
Wednesday, April 28, 2004; 9:48 AM

Technology companies are jockeying for position in the digital entertainment race, forming alliances with Hollywood's biggest players in hopes of discovering the next iPod-like idea that prompts consumers to spend more on hardware and content.

"What's really the key here is the industry is transitioning from an analog world to a digital world," said Shane Robison, Hewlett-Packard's chief technology officer, as quoted in The San Francisco Chronicle. Robison "said the company plans to collaborate even more with the entertainment industry as content increasingly goes digital." HP, of course, has new deals to expand business ties with two of Hollywood's biggest names -- Warner Bros. and DreamWorks.
• The San Francisco Chronicle: Courting Showbiz New Thing At HP

In a separate part of its multi-day exploration of the digital entertainment scene, The Chronicle reported that a "'perfect storm' of circumstances is creating a consumer-driven convergence of computer technology and digital entertainment. For starters, DVD players and movies are expected to be in two-thirds of American households by the end of the year, according to Adams Media Research. Recordable CD burners are common on computers, and DVD drives are close behind. And for many consumers, the PC itself has become the medium to download, share, store and play music, replacing stereo systems. The InfoTrends Research Group estimates there will be 300 million digital cameras or camera phones in use worldwide by the end of 2004, creating a need for programs designed to manage all those images. Then add to the mix the popularity of video games, faster computer chips, the capacity to store more data, the growing acceptance of both high-speed Internet connections and wireless networks, and the push for digital and high-definition TVs."

The Chronicle continued: "With all things going digital, tech firms that built their businesses on revolutionizing the business world now believe they can dominate consumer entertainment. They envision a digital home in which all forms of content -- music, movies, photos, the Web -- can be moved, reshaped and accessed anywhere at any time from a variety of networked devices. At the center would be a central media server, handling digital entertainment in the way computers at the office route e-mail and spreadsheets."
• The San Francisco Chronicle: Converging on the Digital Home

Digital entertainment was all the buzz at last week's National Association of Broadcasters convention in Las Vegas. In a Monday piece, The New York Times described how tech firms used the gathering to bid for Hollywood's attention: "The techies played so hard to the show business crowd, it was easy to forget the two industries were ever at war. ... With growth slowing in both entertainment and technology, players on both sides started to accept an uncomfortable reality: they simply could not afford to go on fighting. The ability to deliver movies and music over the Internet in a pirate-proof format could mean big money for movie and record companies, which have long complained about the expenses of manufacturing and distributing their wares. And as Apple is proving -- it now sells more iPods than Macintoshes -- there are equally fat profits for those who can ease the distribution and consumption of digital entertainment. The result is what looks like a beautiful new friendship. Joint ventures, strategic alliances and photo opportunities materialize every week, as tech companies jostle for position in the entertainment world, and producers enjoy the courtship."
• The New York Times: Technology and Show Business Kiss And Make Up (Registration required)

Apple: A Digital Entertainment Case Study

"Perhaps no other device symbolizes Silicon Valley's shift to digital entertainment technology better than the iPod," The San Francisco Chronicle noted in a Monday piece. "It's been such a success that companies in both the computer and consumer electronics industries are scrambling to imitate the iPod, as well as Apple's closely linked online iTunes Music Store, which will start its second year of operation Wednesday. ... Apple is transforming itself into more than just a computer company known for its small but successful niche market. 'You could call Apple a digital electronics company,' said Charles Wolf, an analyst at Needham & Co. 'They're a hybrid at this point.' He suggested it's possible Apple will drop 'Computer' from 'Apple Computer,' in the way Dell did. The transformation began in early 2001, when Apple Chief Executive Officer Steve Jobs said he wanted the Macintosh to become the digital hub of the home."
• The San Francisco Chronicle: Music Sweeps Apple To The Head of the Class

The San Jose Mercury News today writes more about Apple's transition from a PC company to a digital entertainment company: "ITunes' success has transformed Apple from a boutique player in the computer world to a company whose iPod music player is at the center of the digital entertainment revolution. Technologists are now speculating on Jobs' next move -- a Video iPod, perhaps? Apple was not the first company to sell music downloads, but it was the first to make finding new music easier than browsing the aisles of the neighborhood record store. It also was the first to integrate the store with a portable music player ... And it was the first to offer a wide range of music that listeners actually wanted after Apple Chief Executive Steve Jobs personally lobbied record-label executives once fixated on shutting down digital distribution of music, persuading them to experiment with new ways of packaging and promoting songs."
• The San Jose Mercury News: iTunes Hit Right Note

Speaking of iTunes, Apple has released a new version that includes "iMix, Music Videos, Video Trailers, support for importing Windows Media Files. Free weekly downloads and Radio Charts," MacCentral reported. Apple has also started a free download of a music single each Tuesday.
• MacCentral via Yahoo!: iTunes 4.5 To Add iMix, Videos, Trailers, WMA Import, More

So what's next for Apple? Let's refer back to the Sunday New York Times piece mentioned in Monday's Filter: "No one outside this famously secretive company may know for sure," the Times said, "But because Mr. Jobs has been so publicly critical of tablet computers and hand-held video players, some outsiders have suggested that Apple may choose to offer a Macintosh-style interactive television system for the living room, competing with Media Center PC's, designed by Microsoft and Intel, and with the PSX video game and digital video recorder, soon to be released by Sony. But another avenue is more likely, according to several people close to the company. Mr. Jobs is legendary for being idiosyncratic and unwilling to follow industry trends. Wouldn't Apple's co-founder want to avoid the crowded market for digital entertainment products, they suggest, and turn his laser focus on a mobile digital communications product?"
• The New York Times: Oh, Yeah, He Also Sells Computers (Registration required)

Comcast's Powerful Box

Just because Comcast dropped its unsolicited bid to buy Disney, it doesn't mean the cable firm is halting efforts to compete in the digital entertainment marketplace. Comcast is launching its own new cable TV box, billed by The San Jose Mercury News as "a state-of-the-art entertainment system through a set-top box should grab the attention of satellite TV providers DirecTV and Dish Network, as well as San Jose's TiVo." The Moxi Media Center is made by Digeo (of Microsoft founder Paul Allen fame) and developed by WebTV founder Steve Pearlman, the paper noted. "Now that Digeo has cut a deal with such a powerhouse as Comcast -- with an estimated 20 million subscribers nationwide -- it pretty much does away with any hope that TiVo will land a deal with a major cable operator, something that analysts have said is needed if TiVo expects to grow beyond a niche market," The San Jose Mercury News reported.
• The San Jose Mercury News: Comcast Releasing Its Own Set-Top Box

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