Windows Vista Open To Broadband Universe

While software-geek society greeted the release of Windows Vista, Microsoft’s much-hyped new PC software, with mostly bored skepticism (CNET called it “warmed-over Windows XP”), the new souped-up operating system could have major implications for the digital media business.

Ranging from jump-starting TV and Web convergence to pumping life into the company’s foundering search product, Vista promises to push the broadband envelope. However, the near-term trick for the software giant will be convincing consumers they want and need to use all of its new functions.

Besides providing users with all the typical computing basics, Vista is designed to let them easily watch TV shows on their PCs and view PC content on their big, high-def screens (as long as they have a premium version of the product and buy a special adapter). At launch, the company has signed four charter media partners: Nickelodeon, Fox Sports, Starz and Showtime, each of which gets premium positioning in the menu of Vista’s snazzy, super-intuitive interface.

Vista also features a cable-friendly DVR, an advanced programming guide, a DVD player, a TV-like remote control—it may even dice onions. And unlike Microsoft’s Media Center PC, which also promises most of these options—but has caught on with few consumers—Vista will be built right into the vast majority of computers that ship this year, potentially creating a sizable user base in a short period of time.

It’s also questionable whether the average consumer knows about these options, wants to use them or can even figure them out. Microsoft chairman Bill Gates, however, boldly predicted Vista “will transform the way people work and play.”

“There seems to be a lot of early adopter enthusiasm right now for Vista’s two premium versions,” said Patrick Cartmel, senior partner, global, MEC Interaction. Consumers “are buying Vista because they want these capabilities. The question is, for regular consumers, what is going to happen? Is there a value proposition for them? I don’t think it’s there yet.”

For the media companies involved in Vista’s launch, most readily acknowledge that they don’t know how the software will ultimately affect users’ media habits. But they feel safe following Microsoft’s lead.

“We take a lot of bets,” said Steve Youngwood, Nick’s evp of digital media. “In technology you have to. But it is Microsoft. That’s one you have to bet on.”

“I don’t think anybody can say what the consumer experience is going to be within five years,” added Brian Grey, svp, general manager at Fox Sports Interactive. “So we are always looking to get Fox Sports content to as many platforms as possible.”

So does Vista have a marked advantage when it comes to encouraging Web/TV convergence over other products—even the upcoming Apple TV? Some media execs point to the ubiquity of Microsoft’s distribution as well as the operating system’s user-friendly design. “The operating system is still core to people’s experience on the PC,” said Grey. “That familiarity always helps.”

But others say that for anyone to really get excited for Vista, it needs more media partnerships. “The new user interface is cool,” said JupiterResearch analyst David Card. “It’s a good product. But there’s not a ton of content for this device.”

Besides accelerating the connection between TV and the Internet, Microsoft surely hopes that Vista gives a boost to its own Web products, namely MSN and MSN Live Search. Cartmel expects that because Vista makes it easy to use MSN’s search product on the desktop without actually having to open a browser, “that in itself would drive incremental searches.”

But Card countered that desktop real estate is overrated: “The desktop just won’t cut it. MSN would be No. 1 if that’s all it took.”