The Clicker: A sitdown with Microsoft's Joe Belfiore (Part I)

Every Thursday Stephen Speicher contributes The Clicker, a weekly opinion column on entertainment and technology:

You might not know the name Joe Belfiore, but chances are you know his work. As the VP in charge of Microsoft’s eHome division, Joe has been instrumental in helping to grow Microsoft’s dream of a media-rich computing experience into a SKU, Media Center Edition, that at last tally has sold over 6.5 million copies.

This week I sat down with Joe. What did I learn? Quite a bit. I learned that even though Joe is one of the key industry-leaders in the DVR space, his wife wears the remote in their family. I learned that, perhaps, producing a “Digital Cable Ready” computer might not be as difficult as you think. But, most importantly, I learned that if you spend an hour with a fast-talker who is incredibly passionate about his work, be prepared to do some editing.

Below are some highlights from the discussion:

SS: Welcome. We’re fortunate enough to have with us today the incredibly nice, the incredibly talented, some might even say one of the Dons of the DVR space, Mr. Joe Belfiore of Microsoft.

JB: Thank you

SS: We’ll dive right in and ask: “How did the whole Microsoft Media Center Edition (MCE) project get started?”

JB: Right before Windows XP shipped, a group got formed out of a) what was called ‘The Connected Home’ group and b) a set of people that worked on Bill’s house [and they were given] the mission of “re-invent the PC to be great at home entertainment,” and that is the team that eventually became the Media Center team. I joined it after Windows XP shipped and [since then] we’ve tried to have a focus on the combination of a compelling user experience designed for entertainment, a great third party app platform, and working with devices ranging from PC to extenders.

SS: How has MCE changed over the versions [with respect to how people are using it]?

JB: One thing that I think is interesting about Media Center is the way that the value proposition has grown and evolved over time. When we did version one, we had very stringent hardware requirements. Machines had to have a tuner. They had to have a hardware MPEG encoder. They had to have a big hard drive. They had to have 1394. They had to have an IR blaster and receiver. And, as we’ve added more software value (for example – adding a third-party apps platform), as third-parties have started writing apps, as extenders have come into existence, the value-proposition is broader. So, it’s not just about locally using your remote to watch TV on your PC. It’s just as interesting, potentially, to be a desktop PC that can run the NPR 10-foot app that you consume on your Xbox 360. So, as time has gone by and there is a wider range of value that’s delivered through the Media Center software, we feel pretty good about the fact that it’s now on a much broader range of PCs, some of which have a TV tuner and some of which don’t.

Consumers are now using it for a pretty wide range of things. We do a consumer study/buyer study about every year (slightly more often than every year) and as of last spring when the volume was taking off [we found that] people were using Media Center -- although they used it in a lot of different ways. Some people used it as an application with a mouse and keyboard primarily to watch TV while doing email or web browsing on their desktop PC. Some people used the remote with some high degree of frequency. Some people, not the majority (and this goes back almost a year ago), had a home network that could do video, had a remote, and had a TV tuner and were basically set-up to live the dream of their Media Center PC doing all their TV and driving lots of devices. So, it’s definitely a situation where our OEM partners are seeing this range of value, some of which is realized immediately when you buy it, some of which comes later when you buy an Xbox 360 or add a tuner or a third-party app. We’re getting it out there to lots and lots of people who are experimenting and finding a range of ways to get value out of it.

[ON OpenCable and the DirecTV deal]

SS: OpenCable... Congratulations… About time…. When? How? How will it work?

JB: We’re super excited that when Vista launches this fall, we’ll be able to respond to the requests of many of our current enthusiasts to be able to support native, premium, digital content by supporting digital cable.

So the way this will work – we spent an awful lot of time and energy working closely with the cable industry to come to an agreement for a way that cable services could be delivered natively to the PC taking advantage of CableCARD. When you are shopping for a new PC after Vista launches, you’ll have the choice to buy one that is “Digital Cable Ready” and includes the right hardware for you to attach your coax cable from the wall right into your PC. Slap a cable card in and then get all of the great premium High-Definition content like HBO or Showtime or ESPN -- all those things that cable makes available today, but requires a set-top box.

SS: I’m going to focus right back on the words “New PCs”… Only new PCs?

JB: Yes, it will be only new PCs. Part of the way this all worked out was trying to balance the cable industry’s concerns about guaranteeing a predictable level of service. It’s a lot wider-ranging than most average consumers would think. Of course they’re worried about things like a great picture quality, but they also have concerns about things that are mandated by law and are parts of their service that you don’t see and experience everyday: for instance, a guaranteed level of support for emergency broadcasts. So, in trying to help make the situation a win-win for the PC industry and for the cable industry, we arrived at a point where the cable industry could feel great about the PC as a device on their network by getting a guarantee from the maker of the PC that it would work well for all of these things. So, as we roll out CableCARD, the cable industry wanted a way to know that any particular PC that was sold as “Digital Cable Ready” would absolutely be able to deliver on the wide range of things that you couldn’t predict with certainty would happen on a home-built PC.

SS: You talk about a guarantee – I assume that means there will be an OEM certification process.

JB: There are a couple of parts to this actually, and I’ve heard on various Podcasts some confusion about what’s required. There are actually two things that are required. One is that CableLabs has a well-defined process for certifying devices as “Digital Cable Ready” devices. So, there is a component of the future “Digital Cable Ready” PC which we call OCUR (Open Cable Unidirectional Receiver). One vendor that is building these today is ATI. So, any vendor that wants to build an OCUR device has to take it through a certification process at CableLabs which is well-defined. They have a number of certification waves that happen at scheduled times every year. It’s a published test suite that it has to pass. So, that has to happen for the device that receives cable and translates cable conditional access from the CableCARD to Windows Media DRM. So, that’s one part. The other part is that the entire system as shipped by the OEM has to be, for the purposes of this discussion, “certified.” The PC vendor has to notify CableLabs of the model of the PC that will be “Digital Cable Ready” and indicate that its entire system from the graphics card to the OCUR will support what is needed for things like the Emergency Broadcast System.

SS: So what exactly does that mean? Is it a minimum specification level?

JB: The problem that we and cable faced was that this was the first device that cable had encountered that had a really wide range of capabilities and wide range of components in it. Up until the PC, cable’s test suite could certify an entire device solution as it would go to market, but that didn’t make sense for the PC because we didn’t want it to be the case that every single PC model that Dell or HP or Sony wanted to ship with CableCARD had to go through this certification. So the process here is that the OCUR component must be certified, and it has to be built into a system that the OEM can essentially self-certify. By self-certification what that means is that it must meet a set of requirements that includes the way that things get displayed like Emergency Broadcast System and closed captioning, that the minimum content protection requirements are met, and that the system functions together as advertised as you would expect from a “Digital Cable Ready” device. The OEM then basically sends a letter to CableLabs indicating that a particular system is one that they have self-certified and can be shipped as a “Digital Cable Ready” PC.

SS: I assume this will allow the smaller OEMs to produce theirs and it will be a fluid process?

JB: The smallest of OEMs that license Windows through the System Builder Kit (which you can essentially buy today as an enthusiast user) – those folks are not eligible to do self-certification with CableLabs. So the small PC vendors, as yet, can’t do this. We hope to get that process fixed in time, but as we’re at version one for the time-being it’ll be the OEMs which are a step up in size from that. That includes lots of small OEMs but generally not the mom and pop shops that do PC repair and occasionally build PCs.

SS: Will we see multi-stream support?

JB: I may be out of date on this -- my understanding is that as yet there is not an approved spec by cable to actually deliver and ship multi-stream cards, but the minute there is we will support it.

SS: In the meantime, if an OEM wanted to produce a machine with multiple tuners, can they use multiple OCUR devices?

JB: Yes.

SS: DirecTV… Will this also be in the Vista timeframe?

JB: We haven’t announced the specific timeframe around when the DirecTV products will be available. The team is working super hard right now with DirecTV. We’re absolutely well in progress of getting this done. However, we don’t yet have everything figured out to the degree that we’re ready to tell a date, but once we get there we know that people are super excited about it – we’ll let you know.

SS: OK so we won’t talk dates. We’ll talk product; will it be a similar product to OpenCable?

JB: The basic idea is very similar, which is that you can get essentially a receiver device that is a DirecTV receiver and connect it through some digital connection to your PC. [Doing so] lets you get all the great value from the DirecTV service, including High-Definition. If you subscribe to NFL Sunday Ticket, you’ll be able to get that. All that good stuff.

SS: Via the Media Center 10-foot UI, correct?

JB: Yes.

[ON HD-DVD/Blu-ray]

SS: Why HD-DVD?

JB: There are two ways to look at how Microsoft is involved in Blu-Ray and HD-DVD. One is, from the perspective that Windows and the PC is an open-standard we’re going to absolutely make sure that our partners can deliver the value that they want to their end customers. For example, take Sony as a PC vendor; Sony will certainly ship Blu-ray drives with their PCs, and we will do work and are doing work to help ensure that they can provide a Blu-ray experience that will make sense on their Media Center PCs.

SS: Within the context of your 10-foot UI?

JB: Yes. That said, we also have an opinion about the kinds of things that are most valuable and compelling to consumers and partners, and we’ve gotten behind HD-DVDs because of some of the characteristics in it that we think can make it a great experience.

SS: Such as?

JB: One is – we really like the interactivity layer, iHD. We had a hand in developing it and we think that it’s going to deliver really compelling interactive ways of viewing content. I was lucky to get to demo some of this at CES in Bill’s keynote and I really genuinely think that this kind of rich interactivity layer can change the experience that you’ll get in watching movies in a way that’s different than just more pixels and higher quality images.

SS: To be fair the Blu-ray group also has an interactivity layer that’s built on, I believe, Java.

JB: Right

SS: What makes iHD better?

JB: From our perspective it’s something that we can invest in and make better. So, because we have an active participatory role in it, we can make sure that it runs great on PCs with Windows. We can make sure that the technology is as rich as necessary. So, in that sense, it’s having a direct role that’s an appealing thing to us. Another big thing for us is enabling managed copy and, in truth, I think that this is the most significant advantage of HD-DVD as defined today, or at least in my most recent knowledge of it.

The idea here is that you could use your PC or some other device and know as a consumer, with certainty, that any disc you buy will have an offer that will enable you to store digital content on hard drives and not need the shiny disk anymore. So one thing that I think people have been confused about is that Blu-ray makes it possible as an option, but HD-DVD mandates it. Which means it’s a guaranteed value proposition for any disc or any content under HD-DVD.

SS: Now… HD-DVD mandates that the consumer be given the option. However, that option could, in fact, be the full price of the DVD once again [once for the disc and once again for the copy].

JB: It could.

SS: Doesn’t that make it about half dozen of one 6 of the other?

JB: I disagree. Only because given a particular title on Blu-ray, if a studio says, “I don’t want a copy of this ever,” that a possibility. Under HD-DVD, if you really care, you can do it in a way that is supported, authorized, and doesn’t require you to download some software that does some circumvention of DRM or something.

SS: At twice the cost…

JB: Maybe. The beautiful thing about that is now the market can get involved. If you look at standard DVDs today there’s no market forces really in play -- aside from completely bypassing all the copy-protection -- where studios can experiment with different pricing approaches, can offer subscription models, etc. The really nice thing about this, although this may have (in the short-term) the flaw that you point out and might be very expensive in some cases, it will create competition. It will create experimentation and if you think about that as an ‘over time’ phenomena, the end result will be, I think, something that will be new consumer value that we just don’t have today at all. So, not surprisingly, from our focus on the PC and even from my perspective as a Media Center guy, being able to say that this is absolutely part of the value proposition, and now competition and flexibility and all those things will take hold and will evolve is a pretty significant advantage.