Digital Media Bundling 2.0

There's something eerily familiar about Silverlight—the technology formerly known as WPF/E, or Windows Presentation Foundation/Everywhere, and presumed Flash killer. Silverlight's heavy integration with Microsoft development tools and desktop and server operating systems smacks of Microsoft's competitive tactics against Real Networks. The strategy didn't work then, so why should it now?
Microsoft's media bundling escalated with release of Windows XP and also media serving technologies made part of Windows Server. The European Union so frowned on the practice, Microsoft had to release, on the Continent, versions of Windows without the media player.
But the real impact of the bundling is dubious. Unquestionably, Windows Media is a success among businesses for internal creation and distribution of digital content; low cost and integration with other Microsoft software are major reasons.
In the consumer market, Real's position is lessoned for distribution of Web content, but in many ways so is Windows Media's. No longer do the majority of Web sites offer content in either Windows Media or Real formats. Most sites, in fact, ask consumers to make no choice at all.
Real is in many ways a vanquished Microsoft competitor, but Flash Video, not Windows Media, is a major reason why. Flash has usurped Microsoft and Real formats, in part because of its cross-platform appeal. Microsoft doesn't easily cede to a competitor, and Windows Media is still used plenty of places. Silverlight is much more than about animation. It's also very much about video, particularly for content already created as WMV (Windows Media Video).
Microsoft's media bundling will be much stronger than before. Expression, Silverlight and Visual Studio Orcas will provide tools supporting tight desktop and server integration. For Windows Longhorn Server, Microsoft will make available IIS 7 Media Pack.
"Microsoft has an installed base of millions of Visual Studio developers that it can potentially sell the Expression line of tools into, and any design teams that support them," said Chris Swenson, NPD's director of software industry analysis.
As has been Microsoft's bundling mantra in the past, Silverlight is being promoted for low cost and convenience (from integration).
"Distribution—there we have a 30 to 50 percent cost advantage [over Flash]," Forest Key, director of product management for Microsoft's design tools, told Microsoft Watch. "Assets are created the same way as Windows Media."
Key also said that content creators can access their existing Windows Media content in Silverlight.
Flash killing probably isn't Microsoft's primary or even only motivation for the approach. Convenience and lower cost are legitimate customer benefits. But Microsoft benefits, too, through bundling off its dominance in desktop operating systems and rapidly increasing success on the server.
But Microsoft has been here before, and failed with digital media bundling. Bundling isn't always an effective strategy, despite the prognostications of Microsoft competitors and EU trustbusters, crying anti-competitive foul. Still, there is an irony that Microsoft competitively targets Adobe and Flash, which inherited the position once occupied by Real.