January 11, 2007 4:00 AM PST

Microsoft's Bach looks for harmony in entertainment

LAS VEGAS--Robbie Bach is a busy man: He's trying to fend off Sony and Nintendo in the game console race, and to catch up to Apple in the music business.

But the toughest task assigned to the head of Microsoft's entertainment and devices unit may be less obvious: getting all of the software giant's disparate units working together to form a cohesive entertainment strategy.

"It's the reason why we changed structurally how we're organized," Bach said, referring to a September 2005 reorganization that put the teams that develop software for cell phones, TVs and music players in one division reporting to him.

Robbie Bach

As he toured the crowded Consumer Electronics Show floor here, Bach explained to CNET News.com his strategy for moving the company more deeply into consumers' living rooms.

Bach said one key move has been to use the same teams that developed one new product to create another--such as tapping members of the Xbox game console team to help create the Zune media player, which he knows is a big challenge.

"We've worked well together as a team, and I think we're up to it," he said. "It's not easy, but I think we can do it."

Consumers in the frame
Bach said the company has two immediate priorities for its consumer entertainment products. The first is making them into Microsoft-size businesses, akin to franchises such as Office and Windows.

"In each of these individual businesses, we have to get them to scale," the division president said. "Xbox is getting there, mobile phones is getting there, Zune is just getting started. TV and video is just getting started. But we're making progress."

Next is trying to find a community aspect. Microsoft needs to "figure out how to create the social aspects of entertainment and bring that to music, and bring that to video and TV, just like we brought it to Xbox," Bach said.

Robbie Bach
Credit: Microsoft
Robbie Bach

The company has seen with multiplayer online game service Xbox Live that when it can convert customers into a community, it adds up to a better business, he added.

"Once somebody joins the Live network, whether as a member or as a subscriber...they buy more games, it turns out, they start to download videos, they start to download arcade games," he said. "Pretty soon, that's their world. It's the social-networking phenomenon that you see in the video space and you see in the social community space on the PC."

Buy once, listen all over
Bach's longer-term goal is to start dovetailing all of Microsoft's different entertainment pieces. It's been slow going so far, he said.

As he sees it, people should be able to buy music once and then use it on any Microsoft-powered device--whether a Media Center PC, an Xbox or a Zune. Connected services, such as chat, should be able to cross barriers, too.

"There is just my music, and it is there whenever I want it," he said. "And when I want to talk to my music friends, they are there too."

One of the major obstacles to setting up the cross-use of music, film and TV clips is convincing Hollywood studios and record companies to allow it, Bach said. As copyright holders, such companies are typically nervous about the distribution of digital copies of their works.

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"Most of it just comes down to people really understanding the scenario and getting comfortable with the technology," he said. "There's still a lot of understandable paranoia about content."

But as entertainment companies see the technology in action, and start to see alternative business models producing real revenue, they will embrace it, he said. "People have to see it. They have to feel it. They have to see it materially change their business."

Microsoft has made some small gains. In particular, it has persuaded record companies to allow Zune to squirt songs from one device to another--albeit with heavy restrictions. Songs that come from another Zune can be played only three times over three days.

Bach also said he doesn't believe Micorsoft will have to convince everyone itself. "Really, what it takes is it takes two or three leaders to blaze the way," he said. "Once we get that to happen, I think the rest will follow."

See more CNET content tagged:
multiplayer online game, entertainment, Consumer Electronics Show, Microsoft Xbox, Microsoft Zune

10 comments

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Microsoft's Entertainment Strategy
More "blah, blah, blah..." from Bach and Microsoft. Microsoft talks,
Apple delivers.
Posted by mofo111 (107 comments )
Reply Link Flag
Apple fanboys' arguments
More "Microsoft sucks, Apple rules" from them, Steve Jobs and Apple.
Apple talks, Microsoft dominates the markets.
Posted by Ryo Hazuki (378 comments )
Link Flag
Somebody help me understand...
Robbie Bach is supposed to be the Microsoft equivalent of Steve
Jobs, right? The charismatic "idea guy" who understands what
consumers want?

Well let's look at his record:

XBox - Small market decent succcess - lost money.
XBox 360 - small market, middling success. Still losing money,
or making a small profit, depending on who you talk to.
Zune - Universally punted. Only compelling feature is crippled.
Creepy marketing. Losing money - and will continue to do so for
the forseeable future.

And then there's this nebulous paragraph: "As he sees it, people
should be able to buy music once and then use it on any
Microsoft-powered device--whether a Media Center PC, an Xbox
or a Zune."

What? LIke the iPod, iTunes, and Apple's machines have been
doing for a couple-three years now? Jeez. That Robbie sure is
smart. "See what that other guy is doing? We're going to do that,
too."

Am I missing much? How come News.com can't do stories that
allow us to more objectively measure the successes of various
tech personalities or their strategies? Is it because they'll lose
access if they don't do a puff piece on certain executives every
now and then?
Posted by Hep Cat (440 comments )
Reply Link Flag
There Is A Lot ...
There is a lot that Apple could do to make the "iPod experience" (since they don't have a game console) better. They've a proven track record of being very incremental about adding features for which their buyers clammer. Maybe MS will beat them to some of those features, maybe not. But competition improves the breed. I root for both company's success because we, the end-user, will benefit.

--mark d.
Posted by markdoiron (1138 comments )
Link Flag
APPLE FACES CHALLENGES
This is the guy who said the iphone would be to complicated or
challenging or something... right?

So the guy who said it cant be done is Microsoft's wanna-be
version of the guy who got it done?.... that cant be good for
Microsoft... I wonder what else is to challenging in his eyes.
Posted by zuted (6 comments )
Reply Link Flag
Microsoft is an OS company
Apple and others are better for devices and Google is the search king.

Microsoft tries to be everywhere but they are spread too thin and that is why none of their products are the best.

I like to choose the best and that means choosing from companies like Apple and Google.

The only MS products I choose to buy is their desktop. I don't even use their server offerings because Linux is better.
Posted by t8 (3716 comments )
Reply Link Flag
Play it anywhere???
>>> people should be able to buy music once and then use it on any Microsoft-powered device--whether a Media Center PC, an Xbox or a Zune.

Hmmm... I thought you could do that already... But, I wouldn't know because I avoid DRM'd music.

What people really want, is to be able to play it on any device, Microsoft or not. But, the media companies are dictating the DRM terms. Both Apple and Microsoft have to agree to the DRM "rules".

Buy the CD - Play it anywhere. Rip it to MP3 - Play it on your PC, Zune, iPod, Mac, or anywhere else!

Or, download a song from Napster. Burn it to CD, rip that to MP3, and live with the double-encoding losses.
Posted by DougDbug (62 comments )
Reply Link Flag
What a Twisted View of Consumers' Prerogatives
Check this out.

>>> people should be able to buy music once and then use it on any Microsoft-powered device--whether a Media Center PC, an Xbox or a Zune. <<<

TRANSLATION:

Consumers should be free to listen to music anywhere - as long as Microsoft gets paid.

Imagine JVC announcing in 1974 that consumers should be able to enjoy their music on a turntable, a cassette tape or the radio - as long as it's on a JVC device? People would have laughed themselves sick.

No greater indication of MSFT's sickness in believing it is entitled to be at the center of all transactions has ever been put into print.

It's great to see Warner issuing vinyl records again. You can play it on 40 years old technology. It sounds great. No DRM to worry about.

Maybe this is why record turntables are outselling Zunes on the Amazon bestseller list.
Posted by Sumatra-Bosch (526 comments )
Reply Link Flag
microsoft - linux apple
I think much bettr than microsoft is apple or linux. For example notebook with windows is worse than iBook
Microsoft without windows would be poor and empty.
I'm enjoying for example apple iPhone look at iPhone Apple - VIDEO http:/i-skype.blogspot.com/2007/01/iphone-apple-video.html
Posted by lukascv (4 comments )
Reply Link Flag
Ignorance, bias, uncoherence
If Apple or Linux are much better than Microsoft why aren't they markets leaders instead of Microsoft? If notebooks with Windows are worse than iBook why are there more notebooks with Windows than iBooks? Microsoft without Winodws would be poor and empty? Actually no, because you're forgetting Office. But I can also say Apple without iPod would be poor and empty and *that* would be true. Regarding Linux I don't even need to say anything because they alreay are "poor and empty".
Enjoy your Nokia N95 with touchscreen with the Apple logo.
Posted by Ryo Hazuki (378 comments )
Link Flag
 

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