The megalomania continues - Microsoft in Wired:

Microsoft has two visions for the future of digital media: unlimited choice for consumers, and unlimited control for producers. One thing's for sure, it's unlimited opportunity for Redmond.

....These two homes represent two futures. The first is what consumers want: digital media their way, in whatever form suits. The second is what Hollywood wants: media lockdown, with every use subject to permission and often then only for a fee.

In the middle stands Microsoft, determined to navigate these extremes. In the face of a rapidly maturing business market, Microsoft needs to find a way to persuade consumers to upgrade their PCs.

The answer: films, music, and other digital media flowing from one Microsoft device to another. But Hollywood owns the content. The record labels have seen what can happen when consumers gain total control; the film studios aren't about to let file-sharing ruin them. And so Microsoft is working both ends simultaneously - on one hand, wowing consumers with next-generation PCs that can outperform consumer electronics devices; on the other, reassuring Hollywood that digital media does not have to mean digital theft.

Like it or not, the path Microsoft takes will determine the future of digital media - thanks to its dominant desktop market share, the company's actions set the pace for the industry. If it pushes as quickly as the underlying technologies allow, taking a page from Apple's "Rip. Mix. Burn." playbook, it could create extraordinary consumer demand. Millions of people might opt for broadband in their living rooms, just as they have adopted DVDs and wide-screen TVs. But if Microsoft can't reassure Hollywood that this isn't all about piracy, the studios will choke off the content supply by whatever means they can, slowing the market and creating a crisis not unlike that faced by the music industry.

It's a delicate maneuver, requiring equal parts technology and statesmanship - two words that go together like socks and sandals. As a strategy, it's pure politics, weighing one interest group (consumers) against another (content providers). The Microsoft man at the scales: Will Poole, senior VP in charge of the company's $10 billion Windows client division. His real title ought to be chief diplomatic officer.

....Poole followed the Media Center Edition launch by introducing Windows Media 9 earlier this year. To consumers, Media 9 is a media player - like RealPlayer or QuickTime. To Microsoft, it's a $500 million attempt to build a platform for digital media in the same way that Windows is a platform for productivity tools. In a matter of months, Microsoft has licensed the codecs (compression-decompression algorithms) to dozens of consumer electronics manufacturers, enabling Media 9 files to play on everything from DVD and MP3 players to phones and car stereos.

The quality of Media 9 playback is amazing. Microsoft product managers and engineers boast about stuff like 24-bit audio and high-definition video, but what it comes down to is this: Media 9 digital music files play in four-speaker surround sound, instead of on only two channels like MP3s - even though the file is 50 percent smaller. Movies appear at up to six times the resolution of a DVD. And if you have broadband, you don't have to wait for streaming files to buffer. "With Windows Media 9," says Poole, "we've broken through a quality barrier that actually puts the PC platform ahead of consumer electronics devices."

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