Microsoft preps for epic battle in online video space


Microsoft Corp., which has belatedly sought to harness the explosive potential of online video, is now desperately trying to play catch up with the frontrunners in the field, notably Google.

And Redmond’s game plan for doing that includes a significant new product launch, and forging new partnerships.

Microsoft – so far at least – doesn’t appear to have jumped curves in this “high stakes” game. It hasn’t done anything that could swiftly catapult it ahead of the current frontrunners in this high stakes game.

Silverlight’s glow

However, recent Microsoft initiatives in the Web video arena highlight some of the focal points of rivalry.

For instance, through its launch of Silverlight – a new Web video tool – Microsoft has sought to steal some of the thunder from Adobe Systems.

Silverlight, launched at the National Association of Broadcasters show in Las Vegas last month, has been positioned as Microsoft’s “answer” to Adobe’s Flash Player.

It’s basically a Web browser plug-in for playing media files and displaying interactive media applications that Microsoft.

Under development for two years, Silverlight can display Web apps – on Windows as well as Mac systems – and works with Internet Explorer, Firefox and Safari.

At the player’s launch, Microsoft execs underscored what they claim are Silverlight’s “advantages” over the Flash player.

They noted, for instance, that the windows that display streaming video within a browser are resizable as Silverlight uses Vector graphics.

Other “advantages” of Silverlight that Microsoft is actively promoting to potential customers include:

Ease of download – the plug-in is under 2 MB.

Developer friendliness – Silverlight, the Microsoft Web site notes, is based on Microsoft’s .NET Framework familiar to developers and designers.

Integration with popular Web technologies – We are assured that Silverlight will work with any back-end Web environment or technology. The new player – emphasizes Microsoft – “integrates with your existing infrastructure and applications, including Apache, PHP, as well as JavaScript and XHTML on the client.”

Flexible ad insertion capabilities – The player, we are told, can deliver broadcast-style video or animated ads, without loss of visual fidelity or motion quality.

Lower streaming costs – For the present, it’s claimed that Silverlight can lower the cost of streaming delivery by “up to 46 per cent.” Further cost reductions are possible, we are told, with the soon-to-be-launched Microsoft Internet Information Services Media Pack for Windows (“Longhorn”) Server.

Flash point

While some of these features may speed up adoption, it doesn’t at this point seem likely that Silverlight will steal serious marketshare from Flash.

The latest (March 2007) Flash Player survey puts Flash Player 9 penetration at 84.3 per cent up from 55 per cent in mature markets. (Mature markets include the US, Canada, UK, Germany, France and Japan).

The use of Flash Player by high-volume video sharing sights including YouTube and makes the positioning of Silverlight as the “Flash killer” seem like a tall order – at this point at least.

That’s not to say Microsoft hasn’t scored some early brownie points with Silverlight. Several media and ad agency outfits have indicated they will use the software.

Microsoft’s current partners for Silverlight include Major League Baseball, online video broadcaster Brightcove, Netflix and Akamai Technologies.

Brightcove currently displays all of its video using Flash, but says it will support Silverlight as an output format later this year to appeal to customers who have shown interest in it.

Monetizing video

While Redmond’s product development teams have been busy with Silverlight, its marketing and sales teams have been busy trying to build Microsoft’s video advertising inventory – and with some success.

Just yesterday we learned Microsoft has inked deals with Volvo Car Corp. and whisky maker Chivas Brothers Ltd. to support two new Web-only video shows.

The shows – “Driving School,” a comedy about a driving instructor who imparts life lessons to his students, and “This Is the Life,” a travel and adventure show linked to a Chivas Regal advertising campaign — are produced by Reveille, the production company behind TV shows “The Office” and “Ugly Betty.”

They will be featured on Microsoft’s MSN Web site in the next six months, the software maker announced Tuesday at an advertising industry conference in Seattle.

Again despite these early wins, Microsoft has a tough struggle ahead with competitors like Google far ahead in Web video advertising game – particularly after its acquisition of YouTube in late 2006.

MSN video is currently ranked as sixth as a video destination in the U.S., lagging behind YouTube and sites from Google, Time Warner Inc.’s AOL, News Corp.’s MySpace and Yahoo Inc.

According to Nielsen/NetRatings, in April, 11.5 million people visited MSN video, and spent an average of five and a half minutes on the site, compared with 45 million people who each spent nearly 41 minutes on YouTube.


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