Microsoft unveils new Web video, music software

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SAN JOSE, California (Reuters) -- Software behemoth Microsoft Corp. on Tuesday unveiled new digital media products to send high-quality video and audio over the Internet, turning up the heat on rival RealNetworks Inc.

Windows Media Video 8 could enable near-DVD quality video to be sent over the Internet at transmission speeds as low as 500 kilobits per second (kbps), Microsoft Chief Executive Steve Ballmer told a streaming media show in San Jose, California.

Although that is nearly 10 times faster than a common dial-up Internet connection, such speeds are becoming more common with the spread of high-speed Internet access such as cable or digital subscriber line (DSL) connections.

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Ballmer also unveiled the latest version of Microsoft's audio format, Windows Media Audio 8, promising it could deliver near-CD quality sound at a recording speed of 48 kbps, meaning that a song could be downloaded 60 percent faster than an MP3 file of similar quality, Microsoft said.

"We're focusing on digital media at Microsoft in a big way because it brings excitement to consumers and real economic benefits to businesses," Ballmer said in a statement.

The announcements seemed to one-up similar recent offerings from Seattle-based RealNetworks, which has fought tooth and nail to defend its lead from Microsoft since pioneering the Internet media industry several years ago.

"Imitation is the sincerest form of flattery," Real spokesman David Brotherton said.

"We feel like they are playing catch up. They've announced a lot of claims about audio and video quality with very little, if any, independent testing to back them up," Brotherton said.

In June, Real launched its latest video offering, RealVideo 8, saying it could deliver near-DVD quality at 800 kbps. Its RealAudio 8 technology came out in October with claims of CD-like sound at half the size of an MP3 file.

On Monday, RealNetworks announced a new version of its systems software that enables Web sites to broadcast audio and video, saying it would dramatically boost Webcast quality.

Although Real maintains a huge lead in streaming media, Microsoft cited statistics that show it gaining some ground.

During November, 27.7 million people downloaded an audio or video clip from the Internet in the Real format, compared to 13.2 million people downloading a multimedia clip in the Windows Media format, according to market research firm AC Nielsen.

For Windows Media that is a 35 percent increase over June, when only 9.8 million people downloaded a Windows media clip. Real, meanwhile, gained 9.5 percent between June and November.

Microsoft also touted a feature in Windows Media that would make it possible for publishers and record companies to allow only paying users to view their content, like songs and movies -- a feature that the MP3 and Real formats do not have.

"Digital rights management is fundamental (for companies) to make money," said Dave Fester, marketing director of Microsoft's streaming media division in an interview with Reuters.

Microsoft also demonstrated a CD player produced with Japanese consumer electronics maker Kenwood Corp. that will be able to play CDs that can hold up to 22 hours of music when created with the Windows Media format on a PC.

The CD player will be available in Japan around the middle of next year, Microsoft said.

Microsoft and Real are also jockeying to deliver audio and video to handheld and wireless devices.

Microsoft on Tuesday showed off media software for its line of Pocket PC handheld computers, and announced a deal with Japan's NTT DoCoMo Inc., which is launching a service using Windows Media to beam audio and video to mobile phones.

For its part, Real in June teamed up with Finnish mobile phone giant Nokia in a push to deliver audio and video to Nokia's next generation of phones due out next year.

Microsoft was not alone in offering streaming to handheld devices. Two start-up firms, TuneTo.com and Packet Video both announced new technologies for delivering sound and video to mobile phones and handheld computers.

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