Microsoft Buys Into Move; Tries to Exit Avenue A
On the same day rumors circulated that Microsoft is seeking to offload Agency Avenue A Razorfish to WPP, they announced a strategic investment with Move Networks. Both of these are very good moves.
Say you’re Microsoft, the former king of the software biz which is trying to stay relevant as digital invades and transforms media. Old enemy Apple is encroaching on core businesses, won by focusing on usability. Google has beaten them by aggregating global audiences and changing how ads are sold.
What Microsoft lacks focus, they make up for in talent and critical core competencies like scale, global reach and relationships with multi-billion dollar corporations. Microsoft must reassert itself by positioning Silverlight and other key products as the technologies used by mainstream media and major corporations.
By investing in Move, Microsoft gets a partner with which to push their NextGen video technology to major media. Among its partners Move counts ABC FOX, and a growing number of international broadcasters. While currently most Move partners use ON2’s VP7 codec, there’s no reason they couldn’t switch to Silverlight and VC-1 at any time.
It’s interesting to consider the Move-Microsoft relationship in the context of larger working relationships with CDN Limelight, design firm Schematic, as well as Disney, FOX and a number of other mainstream media companies. Together these powerbrokers have formed something of an oligarchy in online video player development and content delivery which could become a front for Microsoft and other Adobe competitors.
Tags: Avenue A | Razorfish, Limelight, microsoft, Move Networks, Schematic
August 26th, 2008 at 6:59 am
Move Networks was a great investment for Microsoft… it gives them entrance into large accounts, leaves them fully CDN agnostic, and the Move tech fits nicely into Silverlight…
Will be interesting to see what Adobe has on the roadmap and how that influenced Microsoft’s decision
August 26th, 2008 at 8:32 am
As you mentioned, Move’s current large ‘content providers’ stream video encoded in VP7. Move Networks licensed the VP7 for encoding which allows the (mostly) long-form content to be used royalty free by their customers. As VC-1 falls under terms of the standards MPEGLA licensing, what would their streaming and usage fees add to the content providers online initiatives? What would it add to the costs of moving the video to devices? Thanks in advance for your thoughts.
August 26th, 2008 at 2:51 pm
Woah. Rich post. I haven’t learned this much from a blog in a while. I gotta go think now.
August 26th, 2008 at 6:54 pm
The tight relationships between these companies makes their success to a great extent mutually dependent. ON2 offered a good low-cost codec to use when Move Networks launched their service but they have little leverage when competing with entrenched companies like Microsoft. I think it’s likely that Move makes a more permanent switch to Silverlight for the majority of their players in the not-so-distant future.
September 8th, 2008 at 9:23 pm
Weighing in way late here, but Move’s relationship with ON2 actually has a lot of additional potential for mobile video. On2 acquired Hantro a while back, specifically to get their codec into the next gen of mobile phones. I think it would be more likely that Move continues to deliver in VP7 and continue to add support for Silverlight for Web delivery. Just a thought.