Capitalizing on the Digital Entertainment Revolution

Over the course of my career, I’ve had the opportunity to work in a bunch of different technology areas that, in one way or another, have all become part of today’s digital entertainment landscape.

I started out developing flight simulation systems for the military, I spent time in artificial intelligence, and then I was at Apple computer when color was introduced to the desktop, and when QuickTime was introduced—and a bunch of other entertainment related technologies.

A lot of the things we were trying to do at the time were really challenging because the fundamental technologies that linked the computer and entertainment worlds together, were not there yet. The analog and digital worlds were completely separate.

Just this year, I had one of those "moments" where I realized that those barriers were disappearing forever.

So let me tell you a story about when I realized that things had changed. HP sponsors BMW’s formula one race team, and I was at one of the races, in the pit area. I had my HP 945 digital camera, when Juan Pablo Montoya, our driver, drove out of the pits during the race. I was able to quickly snap about 50 pictures.

And I should say, I’m not a great photographer, so I was lucky to have snapped at least this one great picture, most of the others I took -- you couldn’t tell what they were -- different parts of the car, an earlobe, the back of some guy’s neck. I got lots of shots. But this one was really good.

I was able to leverage HP’s strategy to ensure simple rewarding experiences across our entire portfolio -- we call it, "radically simple, better together" -- I popped my memory card into my laptop, deleted all the bad pictures. And then I popped it into an HP mobile PhotoSmart printer. And I was able to print out an incredibly high quality, hard copy print on the spot.

There were also a lot of other people there, including customers, who thought this was a pretty good picture -- and I printed about 50 copies for the people who also wanted to capture the excitement of him leaving the pits. But it doesn’t stop there. After the race, I took my one good photo up to Juan Pablo, and asked him to autograph it for me -- which he did. So I had a record of the experience as a memento.

The cool moment for me was realizing that this whole personal entertainment experience, the whole process, was all digital, it was mobile and most important, it was really easy.

So why am I telling a story about a personal digital entertainment experience here at NAB? Because I believe personal and professional digital entertainment content are converging in some really interesting ways. There is truly a digital revolution happening around us.

One of the most exciting things for me about being here at NAB this year is the role that digital information technology is playing across the professional media and entertainment industry -- from content creation, to content management and distribution all the way to consumption. And this industry, in particular, is one that has always embraced innovative technology.

Compelling storytelling

What I think is most important is what these innovations have enabled you to create. Technology has helped this industry bring comic book superheroes to life; technology has fast forwarded audiences several thousand years into the future; technology has enabled all of us in our living rooms to witness live combat as it unfolds. Technology has made these rich experiences possible for our eyes, our ears and our minds to integrate.

Compelling storytelling has always been the foundation of this industry’s business model—and the good news is, the human need to consume these experiences has not changed—that fundamental business driver will always be there.

However, what has changed is the quality, the diversity, the shear volume of stories and experiences produced.

Storytelling and experiences are distributed digitally through new networks, like secure telecommunications networks -- and being displayed on mobile devices, like cell phones.

Every process is becoming digital, mobile and virtual. Every step you would normally take in creating, managing and distributing content is shifting from a labor intensive, physical and analog process to an automated digital, mobile and virtual process.

So just to make that a little more real, for example, think about my digital camera story. From a process perspective, I didn’t have to physically take the pictures to a lab for developing -- no chemical processing -- it’s all in bits and bytes. It’s mobile, in the sense that I can take the picture with me wherever I go. And finally, it’s virtual in the sense that it’s not a physical object like a negative. It doesn’t sit in a fixed location. And, I can share it virtually in a way that allows people to have access to it from anywhere in the world.

We’ve all seen examples worldwide where audiences are interacting with content through their mobile phones. Cell phones are being used to target audiences, to vote and send live feedback to TV characters, and to even view movie clips. Just last week HP and Nokia announced something called "Visual Radio," a new technology allowing radio broadcasters and advertisers to interact in real time with their listeners, via cell phones.

And its information technology that really has the potential to make these new storytelling experiences, more engaging, more vivid, more personalized, more targeted and more effective across multiple audiences, mediums and devices.

Transforming entertainment experiences

You may not know this, but HP is the world’s largest consumer IT company. We occupy 10% of the world’s total retail shelf space in 176 countries. We’re the largest supplier of information technology to Small and Medium Businesses and we’re the second largest enterprise IT company in the World with market leadership in virtually every category in which we compete -- Linux, management software, servers, storage, etc. We have the broadest and deepest information technology portfolio in the World. We believe that by partnering across this industry we can do a lot of interesting things together.

On the consumer side specifically, digital information technologies are already transforming the entertainment experience in our homes -- with digital cameras, DVDs, PVRs, high-definition TVs and digital displays.

I have a really fun video to show you that will give you a much better idea for what HP is doing to transform the whole digital entertainment experience.

(Plays video).

So is that cool or what? That’s where HP is investing in the digital entertainment experience for the home. But there’s something happening outside the home that I believe is more profound across the whole entertainment industry.

All of the digital technologies that we’ve been talking about, that make this industry so extraordinary, are still just digital islands today -- they’re not truly interconnected in a way that allows you to capitalize on their full potential across everything that you need to do.

These are not my words, they’re yours. It’s what customers like Warner Brothers and DreamWorks, Viacom and Disney are consistently telling me. They tell me that open industry standard technologies are really what its going to take, to help them make the full digital transition possible.

The question on your minds right now might be, "How can we use Information technology to continue to create great stories, to target audiences more effectively, to save money, to make money and create entertainment experiences that perhaps have never existed before, through as many different types of media and devices as possible?"

Today, you’ll hear me talk about how we’re partnering with industry leaders such as DreamWorks, Warner Brothers, CBS, Time, Savvis, and Avid, who are all helping us drive this digital revolution forward.

Today I’m announcing HP’s intention to build out the Digital Media Platform for the future of the Entertainment industry. This will be an open industry standard platform that will help link all the applications and technologies that you use in your business infrastructure together in a way that will help you fully capitalize on the digital revolution.

HP is the only company that can create this platform across your business infrastructure from creation to distribution to consumption -- helping you save money, make money, and create new revenue streams and experiences that never existed before.

Digital rights management

Now, any discussion involving the transition of this industry from an analog to a completely digital world -- across the entire spectrum of what you do -- from content creation, to content distribution, to content consumption, must address the issue of Digital Rights Management and how to preserve and expand great customer experiences in that context

Earlier this year, HP took a strong stand on the importance of protecting digital rights and copyright protected material. We took this stand because we believe that just because technology may evolve faster than our sense of what’s right and what’s wrong -- and just because we have the ability to take someone else’s intellectual property for free, that doesn’t mean that we should.

As we are entering an era in which all content is digital, mobile and virtual, HP is committed to three primary principles in support of digital rights management:

First. to emphasize the consumer experience in this context. Second, to build, acquire or license reasonable content protection solutions, and third, to respect and support the protection of intellectual property and copyright.

Since January, we’ve actually made significant progress on this commitment. HP has become a member of the Content Management Licensing Authority. We've also licensed HDCP technology from Intel to ensure that video cannot be intercepted as it travels between devices, and that the destination device also follows the usage rights associated with that video.

We've also partnered with Philips to propose new copy protection technology for direct digital broadcast recording to the FCC.

And I’m here to tell you today, HP is going to build on the commitment we began here in Las Vegas, at CES last January.

So let’s talk about that. HP recognizes that there are hundreds of millions of analog TV sets out there today.  We also know its going to take some time before consumers replace all those old TV sets with digital ones.  Now this causes some concerns, particularly for the entertainment industry in the process of this digital transition.  Why?  Because when content goes from a digital form to an analog form usage rights usually get lost.

  This loss, plus the fact that it’s easy to convert unprotected analog content back into digital form where it can be illegally copied, is unfortunately stalling progress for the introduction of new forms of exciting and compelling entertainment content.

HP believes that now is the time for all three industries, IT, consumer electronics, and media and entertainment to come together on this issue in a way that will ensure progress -- and ensure that new business models are successful -- even with the huge number of existing old analog TV sets out there today.

We’ve been having conversations about this for years now, we know what needs to be done, and now, its time to get it done. In order to truly facilitate this transition between analog and digital, we need to level the playing field, and that is going to take narrowly focused legislation to move all this forward.

We believe this approach is really what it will take to facilitate the full transition for this industry toward the secure digital delivery of great, compelling entertainment experiences -- experiences that we all know are possible.

So now let’s shift gears, we’re going to jump right in and talk about all the great innovations we’re creating with our customers and partners to help them capitalize on this digital revolution. Let’s begin with our partnership with DreamWorks.

DreamWorks

One company that is recognized as a pioneer in this industry is DreamWorks. DreamWorks has been partnering with HP to capitalize on the digital revolution for several years now.

HP and DreamWorks both have the spirit of invention in our DNA. HP is a 65 year old technology company built on innovation and DreamWorks is the first new major studio to be founded in over 65 years.

In many ways this is a perfect partnership for two companies that don't want to be limited by conventional thought or by available technology.

Back in 2001, HP helped DreamWorks out of a tight spot as they needed computing power to finish their groundbreaking original 3D animated feature film, it involved a certain green Ogre named "Shrek."

Our work with DreamWorks gave us insight into how significantly they were pushing the boundaries of existing technology to bring their vision to the screen -- creating a storytelling experience that both adults and children could enjoy equally.

Together, we've been tackling some of the toughest animation rendering challenges in the world; we've been working to improve the fidelity and security of digital distribution; and together we've been making big strides in information compression, and pioneering new digital imaging technologies.

Today, DreamWorks has nearly a thousand high-end HP graphic workstations running Linux for its most talented and demanding creative artists. DreamWorks Animation has created an HP computing system that spans multiple sites with enough computing power to rank it among the top supercomputer sites in the world. A phenomenal amount of computing power.

DreamWorks is a studio that first creates the story they want to tell, and then they find a way to bring it to life -- irrespective of the technology challenges involved. DreamWorks has never been willing to compromise or to alter their creative vision for a film because the technology couldn't keep up -- frankly HP is not one to let technology limit a customer’s vision either.

It is out of this growing partnership that we are pleased to announce two innovative technology solutions that have implications for the entire industry.

The first announcement we're making today is that "Shrek2" is the world's first Hollywood animated feature film to be rendered using HPs utility rendering service -- providing DreamWorks with 50% more capacity from a pooled set of compute resources. These are resources that DreamWorks can use dynamically, as they need them. So for example, like all utility services, water, gas, electricity, when you need more of something, you just dial it up.

Why is this announcement significant for the industry? Because it means that the storytellers and the creative artists of digital filmmaking are no longer constrained by processing capacity.

At its essence, this dynamic rendering service is both a business model innovation and a technology innovation.

It's a business model innovation because even though DreamWorks has a powerful state-of-the-art rendering facility, they continue to push the boundaries of rich visual imagery and audio effects to create the most compelling experiences possible. And, they're doing it across multiple feature films. Instead of having to make capital equipment purchases, to install, manage and maintain, more and more additional gear to meet their crunch time demand, we offered them an alternative business model -- one that allows them the choice to pay for only the capacity they need.

It's a technology innovation because it gave DreamWorks flexibility in how they used this rendering service. Our Palo Alto data center provided them with a utility-like service that enabled them to prioritize the capacity they needed, when they needed it most -- during peak demand. So they would program their priorities in, and the rest would happen automatically. You'll hear more about this new service in a few minutes.

The second announcement that HP and DreamWorks are making today is a partnership to bring DreamWork's "Virtual Studio Collaboration" to the whole entertainment industry.

One of the most common challenges all studios face is how to enable their various creative teams and studio execs to collaborate across a number of different creative process steps-from storyboarding to reviewing dailies to offline edits etc. And they need to be able to do that any time -- even if they are on the road-which is pretty much all the time.

Using all the greatest movie making techniques -- lighting, sound design, visual effects, etc., DreamWorks has created an incredibly realistic collaboration environment that recreates the experience of working together live in the same room. It's amazing when you actually use this thing -- you have to see it to believe it.

HP is teaming up with DreamWorks to recreate this experience and bring it to the whole industry to use and enjoy.

It's all part of our overall corporate strategy to bring high tech, low cost, and the best total customer experience to our existing markets and new markets.

But, rather than have me go on with the details of these announcements, let's roll a video that will give a much better feel for what both of these announcements are all about.

(Plays DreamWorks video, then invites Ed Leonard, Chief Technology Officer at DreamWorks to the stage. Leonard speaks.)

Now I’d like to switch gears a little bit and talk through another way we are partnering across the industry to capitalize on the digital revolution.

At HP, we realize that one of the great drivers of the digital revolution is customers who want to relive their favorite movies or television shows they saw 20, or 30, or even 40 years ago -- I can relate to the latter. The opportunity to unlock these experiences in new digital quality picture and sound is very real today. Think of this in the context of the more than $25 Billion dollar home video and DVD market.

The problem today is some of the very best stories and entertainment experiences are still sitting in old vaults wasting away where nobody can enjoy them.

That’s why we’re leveraging technologies we’ve developed in our labs around imaging, restoration, archiving and meta-data tagging to help bring these historical treasures back out into the light of day. HP has recently engaged in deals like the one we announced with Time Inc., to digitally restore every image ever published in the history of Time Magazine—these are images like Muhamed Ali’s, "Thrilla in Manilla," or the fall of the Berlin Wall.

Another partnership is with Getty Images, the world's leading provider of imagery, film and digital services -- and our engagement there is to help them manage their assets for their over 150 million unique visitors each month.

Or finally, with CBS, to restore and make available, classic entertainment experiences such as when the Beatles appeared on the Ed Sullivan show and rocked the world for the first time.

Warner Brothers

Today, we have another very special partnership to announce with another entertainment industry leader. This is a company at the forefront of every aspect of the entertainment industry today, from feature films to television, to home video to DVD, to animation, comic books, interactive entertainment and games, product and brand licensing, to international cinemas and broadcasting -- I’m of course talking about Warner Brothers Studios.

Together, HP and Warner Brothers share a common vision for the future of digital media entertainment: a future where digital technology enhances the quality of entertainment media in both its production and its distribution.

HP and Warner Brothers are putting this vision into practice through active cooperation and partnership on a number of cutting edge projects.

This partnership is about harnessing the power of digital technology to restore many of the World’s classic motion pictures and television experiences, it’s about creating new digital tools to define the motion picture post production studio of the future, and, it’s about cooperation as a means for encouraging the transition from analog to digital of filmed entertainment delivery.

Let me just give a few more details on these deals and then I’m going to invite Chris Cookson from Warner Brothers to give some additional color -- no pun intended.

First, on the Digital Restoration front: HP and Warner have agreed to pool their collective expertise in Image Processing to develop and deploy new techniques to restore image quality from Warner Brothers classic motion picture and television library, which is the largest in the world. This includes the ability to dynamically scale storage and computing capacity across multiple restoration projects such as the "Wizard of Oz" and "An American in Paris."

Building on Warner Brothers' proprietary software used to restore "Singin’ in the Rain," "Robin Hood" and "Meet Me in St. Louis" and HP's image, color and data management technologies -- HP and Warner are committed to preserving and presenting the original creative vision of these classic films in stunning digital age quality.

Now, just have a look at the before and after of "Robin Hood," for example. And we’ll see if you can tell the difference.

(Plays video.)

Pretty Amazing. Warner Brothers tells the story of how a famous director, who after seeing his film restored with this method, actually cried halfway through the film. And to date, the consumer response to these restored films has been overwhelming.

Together, HP and Warner Brothers intend to make this service scalable and available to the entire industry.

Digital Post Production

Next, let me say a few words about this Digital Post Production studio of the future. Working at more than four times today's customary digital resolution, Warner Bros. and HP will define and develop the tools necessary to manage and manipulate the hundreds of terabytes of data that are needed to make sure that the quality of what goes into the vault meets or exceeds the historical quality of 35mm film.

This deal will combine HP’s network and adaptive enterprise expertise with Warner’s deep industry knowledge and experience with workflow technologies and processes across their feature film, restored library of films, and hi-definition television shows.

We will also use the results of this collaboration to continue to build out the digital media platform together and make it available to the whole industry as a standard for digital post production.

Now, I’d like to invite Chris Cookson, President of Technical Operations & Chief Technology Officer, of Warner Brothers Entertainment to come up and say a few words.

(Chris Cookson speaks.)

Savvis

Now, in addition to unlocking the power of digital content, HPs digital media platform is also all about the secure enablement of content on the move. This content must be protected as it moves across the multiple networks that we all use today.

Did you know that HP powers almost 90% of the world's financial services transactions? We power the world's top stock exchanges and virtually all the ATM financial infrastructure of the world.

So we know something about securing transactions, and so does our partner Savvis Communications, whose network operating system help us securely manage and move over 65 % of these financial transactions. 

That's why we're pleased to announce today that HP and Savvis are teaming up to ensure the digital media platform will offer the protected management and distribution of digital content. For example, just this year HP and Savvis powered the International Emmys-enabling secure digital screenings for all the judges and the live distribution of that programming content over SAVVIS' Global IP network to sixteen different countries.

New digital experiences in retail

There’s actually a digital revolution that is just beginning on the consumption side in retail environments as well. You may have heard about an innovative partnership between HP and Starbucks announced just this last month.

HP, as Starbucks technology partner, helped the company deliver innovative experiences to its customers through the T-Mobile Hotspot Wi-Fi network that is now available in more than 2700 Starbucks stores across the country. Very big footprint.

Just four weeks ago, we took our relationship with Starbucks to the next level. HP, working closely with Starbucks and its Hear Music brand introduced a revolutionary new retail concept that uses HP technology as its foundation.

So what exactly did we do? We brought together the two things most people can’t live without – music and coffee. Starbucks customers can now choose from thousands of songs across a number of musical styles and then easily burn their own custom, high-quality CD’s, and I’m talking real CD quality.

This breakthrough in the consumer music industry creates a totally new retail experience in which customers can choose their own personalized music. In the end, what you’re able to do is fully customize your music buying experience.

Together with Starbucks, HP is in the process of virtualizing the entire Hear Music library, plus the music inventories from others -- all in all, a wealth of great music. And, we’re helping Starbucks and Hear Music to cost effectively scale this solution to Starbucks locations nationwide -- and then take it international.

In the front of the store, customers use HP Tablet PCs to listen to the music and arrange their custom mixes and then use HP’s integrated burn and print technology to take these CD’s to go.

Behind the scenes, this inventory of music sits on HP storage, servers, networking gear and our digital media software platform---all supported by HP services.

Let’s play a video that will give you a better feel for the experience that we’re helping Starbucks to create.

(Plays video.)

So this custom retail experience is something that only HP could help create by leveraging our full portfolio of products, technologies and services.

Avid Technology

Now, I want to switch gears again, and step back a bit to what I was saying at the beginning of this talk. That information technology is powering this digital revolution. But what about the small and medium businesses that make up the lion share of this industry?

Our success within this industry really depends on a tight integration with the tools that power the artists at every level of production.

One company in particular, began the digital revolution on the creation side for this industry in 1989. This company, Avid Technology, was founded on the promise that a computer and innovative software -- in the hands of a gifted storyteller -- could revolutionize the making of film and videos.

Today, 90% of all primetime TV shows, 85% of feature films, and 80% of commercials are made using Avid products.

At this year’s Academy Awards, every film nominated in the Best Picture, Directing, Film Editing, Sound Editing, Sound Mixing, and Visual Effects categories used at least one Avid solution.

For the past three years, our companies have worked together to develop the world’s highest-performing video editing systems. The result of this relationship is that HP has become Avid’s preferred technology provider on the PC platform.

In fact, the Avid DS Nitris system -- the industry’s most powerful High Definition finishing solution – is available exclusively on an HP 8000 workstation. This HP workstation is the only qualified desktop PC system to use Avid’s workhorse editing system, Media Composer Adrenaline.

Now, I’d like to talk about the democratization of this technology for the rest of the content-creation community: the folks with the boutique post houses, the basement recording studios, the home-based digital effects shops, and the bedroom DVD suites

. For these artists, Avid has just announced the Avid Xpress Studio – the latest in a line of advanced solutions that use HP as their preferred platform. Basically, Avid took its industry leading video editing, audio production, and 3-D animation solutions, added award-winning visual effects and DVD authoring packages, and augmented them with professional video and audio hardware. The result is a totally integrated suite of products that offers new creative possibilities to a wide range of media professionals.

As compelling as this is, the most stunning aspect of all this is its price—it starts at under $4,000 dollars. So, with a standard configured HP 8000 workstation you can get all this power for just under $10,000.

Five years ago, if you had tried to build a similar system with video, audio, 3-D, effects, and DVD authoring capabilities, you would have had to spend well over $100,000 on individual solutions, and they wouldn’t have had anywhere near the level of interoperability, the workflow innovations, or the performance that Avid Xpress Studio and HP bring to the table. With this solution you get a high tech, low cost, absolute best customer experience that only HP and Avid can provide.

So together, HP and Avid are providing widespread access to technology that was once reserved for multimillion-dollar production facilities. And this puts the industry’s most advanced tools into the hands of a much larger community of artists and producers.

By the way, Avid and Savvis are both involved in helping HP and Warner create the digital post production studio of the future—this is just another example of how these partnerships are all working together to create the digital media platform.

Conclusion

Today, I’ve talked about how HP, is helping the entertainment industry unlock new value and new growth. This is an industry that collectively across 14 different business segments is a $1.1 Trillion dollar industry. Its projected to grow to a $1.4 Trillion dollar market over the next three years -- and according to the experts, the biggest, most disruptive shift is the transition to an all digital platform.

HP is the only technology company that can do this across the entire industry -- we’re leveraging our full portfolio of products, technologies and services to help you capitalize on the digital revolution.

As I mentioned, this Digital Media Platform is being built out today based on our accumulated knowledge, experience, intellectual property, and most importantly, ongoing partnerships with companies like DreamWorks, Warner, Starbucks, Avid and Savvis.

HP is the only company that can create this platform across your business infrastructure from creation to distribution to consumption—helping you save money, make money, and create new revenue streams and experiences that never existed before.

DreamWorks, Warner Brothers and Avid are partnerships on the content creation side. Starbucks, Warner Brothers and Savvis are all partnerships having to do with the management and distribution of rich digital content. And finally, Starbucks, and HP’s Digital Entertainment System are creating simple rewarding experiences on the content consumption side -- both in retail and in the home.

HP is focused on driving this today, not tomorrow. You may notice that this talk was not about a lot of hand waving and waxing poetic about the future of information technology. Today I’ve talked about real deals, real commitments, real partnerships, with real value being created.

I believe that information technology solutions, and specifically the power of HP’s portfolio, can help free this industry up to help you create, manage, and distribute exciting entertainment experiences through as many different types of rich media as possible.

The digital revolution is here today. I believe that HP, plus all of you, plus the right technologies, plus the right business models, plus the right stories, plus the right experiences, makes everything possible.