Don MacDonald - Intel talks Viiv

bit-tech: We talked briefly about pricing. How crucial is Linux to getting things out at a decent price point, and how far is its flexibility important to the Viiv strategy as a whole?
Don MacDonald: In the consumer electronics space, Linux is huge, and it's a great option for set top boxes, PVRs etc.

However, we don't believe that Linux in the PC space is relevant in this area. When it comes to the PC world, it really is a Windows world. There really is no alternate demand.

Viiv is all based around standards from the Digital Living Network Alliance. As long as Linux devices can comply with requirements, we can easily have a Linux-based CE device talking to a WinTel Viiv box.

BT: How important is content to the whole equation? It seems like there's some changes going on with regards to how we're going to be consuming media in the next few years. Is this going to put pressure on movie studios?
DM: Movie studios are going to take on lots of personas. They'll still do blockbuster movies, because that process is the result of 100 years of market honing. They know how to make money off that. There's blockbuster release, DVD rental windows, the video on demand over cable, then the network licensing. Will some of that move to online? Quite possibly, but that's not going to fundamentally change the existing model. I think you're going to see studios having a separate persona for online content, where you could have subplots or the like on the internet channel.

Online is going to give consumers far more choices - the real pressure is going to be on crappy content. The rules are not going to change overnight, but if I had the ability to go directly to some of those better channels, rather than paying for a package or for content that is no good, I would. I think that will change the business model over time. Just like iTunes said I can pick my single over buying the whole album, new technology is going to give us more choice.

Viiv opens up whole new possibilites. You might allow people to have access to a service rather than buy the content. For example, if you try to sell games in China, you're not going to do very well. (Piracy is rife - Ed). So we've seen people doing a games service, and they've got 21m paying subscribers. You can see some very good examples, through Viiv, of business models that arere service driven rather than content driven.

bit-tech: What are we going to see happening in the future? We think you need more standards built in to these devices - you're missing HDCP on current generation Viiv boxes, for example.
Don MacDonald: You're going to see HDMI and HDCP pretty soon. They're both key features. If I get my way, they'll be designed into our next generation of Viiv designs. We finalise the specifications for those in Q1, so that's when we decide.

I think a big one is to get a standard for a display interface. We have to make sure the UIs on these things look similar, and it's got to be standards based.

You're going to see more and more things integrated into the processor or the chipset. Currently, there are lots of good things you could have on a chip, but you couldn't afford to do it. If you burden a chipset with an extra $2 cost, that's a lot of money on the small margins that the mainboard industry works too. Timing is everything.

In the future, when the time is right, we can integrate more things. We can put 1.7bn transistors in a chip - it might not be just about pipelines and cache memory, we might decide to use that space for other things, such as video processing.

What about this: last year, FIFA put a chip into the football used in the Latin America Under 21 tournament, so that the ball could be mapped against the pitch. If you could do that for the World Cup, you could have a game where you are participating in a realistic model of the actual game. In Formula 1, you could put precision GPS in the race cars - then you could actually race against Schumacher. It's a combination of broadcast and internet content. If you think about the stuff that could be cool to do because you have ways to integrate digital content in ways that you never thought possible, then that could be incredible. You have that technology do new and exciting things.

Conclusions

Thanks to Don for talking to us about some of these issues. We were interested in the Linux answer, because it really does make it clear that there's no option for Viiv boxes other than to ship with Media Center. MCE is undoubtedly a great OS, but it means - for example - there's no chance of ever getting a Viiv Apple box.

Don also confirmed what we thought: additional features in the chipset. As various components have become standard, we've seen them integrated: from hard drive controllers and ethernet, to sound and graphics cards. As TV tuners ship on every PC in the future, we're sure to see a Southbridge with a tuner in.

It's perhaps true that movie studios aren't about to change their business models overnight - but it rather seems like the middle men will. Lovefilm is currently one of the biggest DVD rental by post services in the UK, and they have just started an online rental download service available through Viiv. It's not hard to believe that over the next couple of years, online could become the majority of their business.

All in all, we look forward to reviewing our first Viiv machine on bit-tech, and to seeing where and how the platform develops over the next six months. With the second platform revision due out in June time, it will be interesting to see how Intel thinks it has done.