Remarks by Bill Gates, Chairman and Chief Software Architect, Microsoft Corporation
Digital Entertainment Anywhere Event
Los Angeles, California
October 12, 2004

ANNOUNCER:  Ladies and gentlemen, the chairman and chief software architect from the Microsoft Corporation, Bill Gates.

BILL GATES:  Thank you.  Well, good morning.  Thanks for coming.

Today, we're going to talk about Digital Entertainment Anywhere.  What's the vision for Digital Entertainment Anywhere?  Well, it's that you should be able to have your music, your photos, your video wherever you go.  And that means a lot of different places.  It means having those media experiences on the phone in your pocket, having a portable device that kids can watch movies in the back of the car, being able to have these things anywhere in the home, whether it's a bedroom with a TV screen, a room that you've just got your great speakers in and you like to listen to music.  And the experience should be unified.  If you set up a playlist, it should be available everywhere.  If you supply the music, all the devices should be able to play that music.

This is a very challenging vision to achieve because it's not something that one company alone can do.  We need great advances in the PC, PCs that are quiet, PCs that fit into the living room in the right way.  We need all the media companies to provide not only the media that they have already, but the new media they're developing, things that take advantage of the rich new platforms, the higher-quality video, the interactivity capability that's there.  We need something that works in the living room, where you can stand 10 feet away and use a single remote control that lets you understand exactly what you're navigating.

In the world of analog media, we don't have that.  We have many different remote controls.  We don't have a simple user interface that guides you through what you're trying to do for setting up, say, trying to record a show, or find a movie that you're interested in, it's far too difficult.  We actually have to raise the level of richness, reduce the complexity, and unify things at the same time we're offering more variety and more power.  And why can we do this?  Well, part of it is the magic of software, and that's where Microsoft comes in.  What you're going to see today is a number of devices running Microsoft software, software that delivers the media experience, and software that is the platform for partners to build on.  And by building on it, they take it in new directions, some directions that we wouldn't have even imagined.

Let's talk about where the world is today in digital entertainment.  Obviously the digital music scenario is exploding.  People are either taking music off of the CD, ripping the CD, or doing some type of download so that they can have their music collection on different devices.  That really is becoming the standard.  It's so much more convenient than working all the time with physical media.  Digital photography, likewise, exploding, the devices are better, the resolution, the richness of the cameras, the fact that you can organize them, communicate them to other people truly that is the mainstream of photography today.  But we also talked about digital video, video is a little tougher, the infrastructure is just moving to digital.  For example, TV broadcast is mostly still analog.  The cable is a hybrid today where a lot of the popular channels are analog, but the new channels are moving to digital.  Satellite was the first to move to digital, and with digital we're getting single purpose devices that are able to record programs and play them back whenever you want.  And those devices are getting more intelligent and connecting up to more things.

We could say that video today is sort of where music was, or photography was four years ago.  With video about 13 percent of PCs have video files on them now.  That was almost five years ago with music.  We have 50-percent broadband penetration in the United States, and so that helps a lot.  On broadband it takes about 14 minutes to download a compressed movie for a portable device, and that's about the same as it would have taken over narrowband to download music.

So we're clearly getting there, bringing this into the scenario, things that you just watch, and even things that you edit, and create yourself.  So video we think will take its place alongside music and photos. You'll be able to mix these together, put your music to your photos, and edit the transitions there.  A lot of rich experiences that, when we thought about it in the analog world, simply wouldn't have been possible.

Some people talk about a contrast between using consumer electronics devices that are single purpose, versus the idea of the unified experience, the multipurpose device.  Clearly, we're taking Windows and the PC and making them the best multipurpose device.  But we know that we've got to make it easy, easy to set up, easy to navigate, and share the user experience. From the remote control experience to the portable device, from the music experience to the TV experience.  And we feel that although these single-purpose devices will be there and will play a role, that it's really the multipurpose device, the Windows PC that will provide the high-volume product, the richness it delivers and the flexibility, and openness.

We have a business model around the PC that's designed to provide choice, a choice of hardware manufacturers, choice of software.  We're extending it now into this experience.

In fact, today you'll hear about many great new things that our partners are doing.  We have a business model here that's very high volume, and it drives the cost of all the elements of it to be less and less.  We believe in an ecosystem where even in the music store you get to pick exactly where you want to buy.  And once you've picked your music stores that you like, that in no way should constrain what music device you work with.

We're taking that philosophy and saying the same thing for video.  Many of these Portable Media Center-type devices, you'll have a choice of exactly what you want there.  And we'll make it easy for you to know that all of these things work together.

Now, this year's round of these products are a big milestone for us.  This is where we see digital entertainment anywhere moving into the mainstream.  This year we'll look back on as an inflection point for those media activities.  Last month our announcements were about the music service, and the new music player, and the portable media device.  That music player has gotten off to a very incredible start.  It's called the Windows Media Player version 10, and we put that out just a month ago, and we've had over 17 million downloads of that.  That's one every five seconds, and actually the rate of downloads is continuing to rise.  So that's an enabling factor.  That's the thing that exposes them all, and gets this all going.  So you can see that when we talk about high volume we're talking about over time, over the years ahead, the majority of households having rich, multipurpose media experiences.

So let me ask Sean Alexander, one of Microsoft's group product managers, to come on out, because I think the best way to understand what we're talking about here, and where we're going is actually to see it in operation.

SEAN ALEXANDER: Hi, Bill.

BILL GATES: Hi, Sean.

SEAN ALEXANDER: Thanks.  I'm excited to be here.

Today we're making a major step forward, enabling digital entertainment anywhere, starting with the music experience of Windows Media Player 10, as you just pointed out.  So, Bill, why don't we take a step over to the den and take a look at how that comes together.

So here I have a CD that I went ahead and ripped with Windows Media Player 10.  I went out to a retail store, bought it, the new Joss Stone album, and playing back that CD on my PC is as simple as going ahead and double clicking the song and here we see the experience.

The first thing that you'll notice is that we cleaned up the look of the Media Player.  We have new visualizations, very easy, very convenient for you to use.  We know the consumer is going to spend a lot of time in their media player enjoying their digital entertainment, so we wanted to make it a very comfortable experience.

Second, we added the ability to go ahead and choose which format you want to rip your music into.  You can choose Windows Media audio, or you can choose MP3, right from within the Media Player, all you have to do is download it.

The third area, which is in the most important area, Bill, is that we added features in terms of Media Player, is that you don't have just a single music service to choose from, you have a wide choice to music services through the world's first digital Media Mall.  That's actually right here inside of Windows Media Player 10.

Bill?

BILL GATES:  Yes, today we're announcing a number of new additions to the Media Mall.  We've got XM radio there, we've got Audible.  And what you're going to see is more and more people coming in with their creative ideas saying what they can offer in this type of mall format, and all they have to do is register with us, and it will automatically show up here for everybody who's got the [Media] Player.

SEAN ALEXANDER:  That's right, Bill.  Let's go ahead and take a look at one of the services that we have here, MSN Music.  MSN Music is launching the full version today, and in fact, they've licensed over a million tracks, and are available in over 17 countries, creating the world's largest music network.  Now, Bill, I can go in here and select to browse a specific album, or I have a selection of different artists I can go ahead and select here, including a number of exclusives for the Windows platform.

I can choose artists like Madonna, Metallica, Lincoln Park, Dave Matthews Band, download any one of those albums.  And that music is only available to customers on the Windows platform, or I can go in and go ahead and select a specific artist just as easily as browsing any one of these tracks.

BILL GATES:  Another exclusive that MSN Music has is their relationship with AC/DC.  They're appearing for the first time on the Internet, and exclusively on MSN Music.

SEAN ALEXANDER:  So, Bill, I'm really into this new band, it's actually from just outside of Redmond, up in the Seattle area called Modest Mouse.  They've been getting a bit of airplay up on the airwaves.  Let's hear Modest Mouse.  So you'll notice here on the artist page I can go ahead and select information about that particular artist.  I can see their entire discography, or I can go ahead and preview any one of the tracks that are right here in MSN Music.  OK, I'm pretty happy with that track.  So let's say I want to go ahead and buy it.  Well, it's as simple as a single click.  All I need is a Microsoft Passport account, and I'm able to go ahead and download that, easily, it's convenient, all of the services work like this, it will show up in my Media Library just like that.  But, not only am I able to do that, I also have the ability, now that I have this track downloaded, play it on and enjoy it on up to five of my personal computers, I can transfer it up to seven times onto an audio CD, or I can go ahead and transfer it as many times as I want to my choice of personal music players.

BILL GATES:  Now, let's talk about where we are with these music players.  As I said, we think it's very important to support variety here.  And the partners who build these players have responded by doing some very innovative work.  First we see some of the players that are memory-based players.  And these are the smallest, the least expensive, and they're actually, volume-wise, the biggest part of the market.  We've got the Rio Forge here, 128 meg, we've got this Samsung, which is a Blue Flash player.  And we've got this Creative, which is almost like a little credit card, they call this their MuVo Slim 256.  So that's a class of device that we think will continue to be important, but part of a mix.

We've also got, it's right here in my pocket, the Rio Carbon, and this came out recently.  You can see how small and sleek this is.  This is one of the hard-disk devices.  This has a 5-gigabyte drive built right into it.  I think that's pretty slick looking, what do you think?  (Applause.)  Let me give this to Sean and have him go ahead and put some of the music he's selected there onto that player.

SEAN ALEXANDER:  Sure, Bill.  I agree, this is one of the coolest devices out there.  It comes with a single cable that charges the device, while it syncs directly into Windows Media Player.  All I have to do at this point is go ahead and plug it in.  No drivers had to be installed.  Windows Media Player 10 will automatically recognize it, and as you can see, it's automatically started syncing both that new CD that I just ripped, as well as the tracks that I downloaded from MSN Music.  It works just as easily with any of the music services, and it's a great experience.

BILL GATES:  They've also done a great job on the battery life.  That device will last for 20 hours.  So any flight from anywhere, to anywhere in the world, you can sit and listen to music and not run out of power.  There's another set of devices here, these are new devices that are coming out this holiday.  In the 5-gigabyte category the first one is this Dell Pocket DJ.  I think that's super good looking and Dell will be promoting that very heavily.  We've got this Creative device, which is called the Zen Micro.  It's available in 12 different colors.  It lights up.  It's go the removable battery, which is very popular with some people.  Then another 5-gig player, this is a Samsung device they call their YP-820, this is fairly notable, because it has a color screen there.  And the color screen means you cannot only put down music, you can put your photos there, and it's a nice user interface.

It was very interesting when a lot of us were looking at these new 5-gigabyte players, we couldn't agree on which the best one is.  And that's exactly the point of the approach we're talking, which is that everyone can choose exactly what they want, have the smallest, the one with the style they like, all very straightforward.

SEAN ALEXANDER:  That's right, Bill.  In fact, let me take a moment to point out the new iRiver H320.  This device is available in stores starting today, and offers support for all the music services that you saw in Windows Media Player 10, but adds support for a new category of breakthrough services, subscription services.  Napster, other services, all of them will work right here with the iRiver H320.

BILL GATES:  We're a big believer that supporting multiple business models for music downloading makes sense.  We think the subscription approach that we've enabled on portable devices for the first time with our work with partners, we think that will be very important.  We also think that licensing singles or albums will fit in and be very complementary to that.  And so it's our commitment that that subscription capability will span all of these different devices, and give you that way of getting at your music.

SEAN ALEXANDER:  Bill, you know, though, a lot of people have mobile devices such as Smartphones, and Pocket PCs, these devices have become practically indispensable for their ability to go ahead and track their contacts, their calendar, e-mail even browse the web.  But we wanted to take that a step further today, and take the Media Player 10 experience, and bring that to a whole new category of devices.  That's absolutely right, over time we think the phone would be one of the devices that you want your music on.  And it should be as simple as taking a few playlists, and it all can be right there.  This AT&T Wireless phone that Audiovox has put together provides that music player built in right now.  And so it's really simple, in fact, I'll hand this to Sean so he can show us how you call up the music.

SEAN ALEXANDER:  Sure.  Bill this is the first phone to have Windows Media Player 10 Mobile built right into it.  You can buy this at retail today at an AT&T Wireless store, and you'll get the complete experience.  I can synch this right from my Windows Media Player 10 library, transfer over my music, my photos, my video, even record a TV directly to this device. And you'll also notice that I even get album art right on it as well.  And just to give you an example, you can hear a little bit of the device here playing. But the key thing to remember here is that it also comes with a set of headphones, so you're able to have a great listening experience, single device, works with all the music stores, Windows Media Player 10 Mobile.

BILL GATES:  Another example that fits in with this total choice is the idea of bringing the Windows Media Player to the Pocket PC.  This is a new Pocket PC which is actually the Dell X-50, a very sleek form factor here, and it's simply got the Media Player built in.  So, again, we have a category of devices that millions and millions of these are sold a year that fit in with whatever music, photos, and videos you have, they all can play on that device.

Another thing about having your media anywhere is having it in all the rooms of the house, being able to connect up to all the different speakers in the house, and here there's a category of device called digital audio recorders.  And, Sean, tell us about our partners for those?

SEAN ALEXANDER:  Certainly.  Now, of course, Bill, we've shown a lot here in terms of being able to playback music on your Windows XP PC, we have devices so you can go on the go. But what about being able to play it around the home?  Today we're excited to announce that we have a number of new partners offering digital audio receivers that work with all of the music services that you're seeing here today.  Here we have an example of one of those.  This is the Roku SoundBridge , and starting today it has full support for Windows Media Player 10 and our technology.

If you notice here, I can go ahead and navigate down into, let's say, Modest Mouse, and you'll see the artist you remember we downloaded off of MSN Music.  I can go and select the track and play it back using my wireless home network or my wired home network.  Go ahead and connect this up to a good set of speakers, the kitchen, even in the garage, all of your music anywhere in the home.  (Applause.)

BILL GATES:  One of the key questions we get is, how do people know what works with what?  And that's very important to us.  We want to give you choice, but we want you to know exactly how that ecosystem fits together.  What we've done is, we've created a logo called PlaysForSure.  And so as you go to the different music stores, you'll see that PlaysForSure logo, and there are many of those music stores there today, and the devices themselves, if you buy them at retail or buy them on the Web, whether it's the DAR, or the home, or the memory base, or just space devices, those will also be logoed with PlaysForSure.  And so you don't have to think about file formats or conversion, you know that all the richness of the experience will carry across to those devices.

BILL GATES:  Well, we've done a lot of talking about music, but I think I made it clear that the vision has got to well beyond music.  Music is a necessary thing.  We've got to do that as well as anybody.  But we want to go and we want to bring in video and photos to the experience as well.  So, let's talk about the living room.

SEAN ALEXANDER:  Bill, I'll go meet you over in the living room in a couple of minutes.

BILL GATES:  OK

SEAN ALEXANDER:  Thanks.

BILL GATES:  So, what's the centerpiece product that brings this all together?  Well, that's Windows Media Center.  This is a product that we brought out several years ago in its first version, and it's been building, building in capabilities, building in hardware support.  This is very typical of us to get something out, take it to the hardcore market, really understand what they need, and use their feedback to drive the next version.  So last year we had the second version of Media Center, and that broadened its capabilities and raised the volume by about a factor of four.  We have now sold over a million copies of Media Center.  And that's great, it's actually quite a significant number.  (Applause.)

But, what we're saying is that with this next version, the one being launched today, the 2005 Edition, we're going to take that volume level up again, up another factor of four or five.  We're moving Media Center into the mainstream.  And this is based on the new features, and on the new partnerships.

We're really pleased with what the PC manufacturers, the OEMs are doing with us here.  All of the top consumer PC manufacturers, that is, all of the six biggest ones, are providing Media Center PCs, and they're doing that with quite phenomenal variety.  They're doing it in the rack form factor with the plugs that you will be familiar with, with consumer equipment. They're providing it in laptop form.  Toshiba has got a Qosmio  that brings Media Center into a very portable form factor.  And it won't just be brand name OEMs, we've also now enabled the smaller OEMs,  that we call system builders, of which there are 800,000 around the world, we've given them the ability to build Media Center products.

One of the key elements of Media Center is this idea of being able to use it when you sit close to it, which we call the 2-foot experience, and being able to use it when you're walking around, which we call the 10-foot experience with the remote control, and giving the person all the richness of both of those things, that is a breakthrough approach that only Microsoft is pursuing.  But, we think it's very important for the vision.

Let me go over to the living room where Sean is, and let's go ahead and take a look at Windows Media Center 2005.

SEAN ALEXANDER:  Thanks, Bill.  As we pointed out, Media Center Edition is designed to be the best version of Windows for any room in the home.  Everything that you just saw in the den environment, we can go ahead and experience it here.  It's designed for the best 2-foot, as well as the 10-foot experience.

Of course, Bill, here in the living-room environment, the best way to experience Media Center is going to be with the remote control.  So all we have to do is press the green button.  But before we get started, I'd like to take a moment to talk about the device that we're working on here.

You notice that this is not a desktop PC, this is actually HP's new Digital Entertainment Center that's designed for the living room as a hub for whole-home entertainment.  I can access all of my photos, all of my videos, all of my recorded TV programs, live TV, all from a single unit, it's truly an all-in-one experience.

You'll also notice on the device, we have the full set of audio and video inputs on the front.  I have a number of digital media inputs for digital cameras, for example, and one of the unique features of this device is a personal media drive bay.  So if I want to go ahead and fill up a hard drive with content, all I have to do is put another drive in, and it's a great experience.

Let's talk a little bit about the 10-foot style of Media Center Edition.  The first thing we've done here is we've made it really easy for you to be able to control Media Center, sitting 10-feet away, sitting across the room, sitting on your couch.  It's as easy to do as if you were flipping a channel on a cable box.  But, you'll notice that we get a lot more here in terms of the experience.  Music, photos, videos, and taking advantage of the PC platform, we're able to provide a much cleaner, and more engaging experience than what you have today in most consumer's homes.

Let's go ahead and start off with the music experience. You'll notice that in Windows XP Media Center Edition, I have access to my full Media Player Library.  I can access all of my albums just by their album art. For example, I can go ahead and select that track that we downloaded earlier off of the MSN Music Service, and play it with the click of a button.

Bill, we designed Media Center Edition 2005 to be the ultimate jukebox experience.  In my house we have a Media Center in the living room, and when throwing a party a lot of friends like to pick up the remote control and add music into it.  So in order to make that even easier, one of the things we've added in is the ability to go ahead and select any particular artist, and to add that music to my play list on the fly, just click Add to Cue.  So now you'll notice if I go ahead and hit Skip, it automatically transitions over into my Joss Stone music.  Now, I can go ahead and build a play list on the fly here, and once I've done that I can go ahead and burn an audio CD, again, from the comfort of a remote control, or even back-up my entire music library onto DVD using the new built-in DVD burning capabilities that are built into Media Center Edition 2005.  It's truly a complete music experience.  But, we didn't want to stop there.

Bill, I don't know about you, you have three kids, right? So I have a 14-month-old son, my wife and I are running around all the time, taking pictures of him, it's a cute age, et cetera.  So what I wanted to do here was show you how easy it is to be able to go ahead and instantly review your photos after you've taken them on your digital camera.  After all, that's the number one reason that consumers are buying digital cameras today, the instant viewing capabilities with the unit.

So here you'll notice I plug my memory card in, and it automatically detects what I have on here, my pictures, and I can go ahead and with the click of a single button have an instant slide show that's played back to the music that I'm playing in Windows Media.  (Applause.)

Here's a couple of pictures of my son, my wife, he's the little temperamental one.  And here's a picture that often people will run into, you have a picture that's made crooked, maybe it could use a little touching up.  So what we did was we added into Media Center Edition 2005 the ability to touch up the top five issues that consumer have with digital photos today.

So here you notice I can go ahead, we'll go back to that photo that I selected before very easily.  I can go ahead and rotate that photo.  Then I can go ahead and touch it up in a number of ways, using the technology that's built directly into the Media Center.  I have red-eye correction, just click a single button, automatically takes care of it for me. I can go ahead and adjust the contrast and the white balance on this photo.  Then I also have the ability to go ahead and crop this photo directly from within the Media Center experience.  And you'll notice that it already found my son in a very difficult picture, and provided for a much better viewing experience than I would have had otherwise.

BILL GATES:  In fact, the technology that can see where you probably want to crop that is something Microsoft Research came up with, and it's just built in and automatic.

SEAN ALEXANDER:  That's right, Bill.  Now that I've got my photos on my Media Center PC, I can easily import them, and how do I want to share them.

Well, I have three different ways with Media Center Edition 2005 to be able to share my photos with family and friends.  First of all, let's take my grandmother.  She tends to like the printouts, so in Media Center Edition 2005 we have built-in printing capabilities, so that I can go ahead and print, perhaps to the printer that I have back in the den.  Now the way that I set this up was using the HP Digital Entertainment Center, and my D-Link wireless access point, I was able to use the wireless that's built into the Digital Entertainment Center, and using just the USB key FOB, Windows Connect Now technology enabled me to plug it into both devices and automatically configure my secure wireless network.  It's as simple as that.

But, that's only one way that I'm able to share my photos. We have two other ways.

The first way that I want to talk about is the ability to go ahead and burn the CD or DVD.  My aunt and uncle, for example, they really like to get the high quality pictures, so oftentimes they'll ask me when they're visiting to go ahead and burn a disk right there, so they can go ahead and take it off, and maybe go to a retail outlet and print them off.  But, there's also the ability in Media Center Edition 2005 to burn a DVD slideshow that will playback in any consumer DVD player.  You can select your photos, select your music, burn it to a disk, and then share it with family and friends.

Then we have a third way to be able to share your photos, as well, and that's with this more pictures feature.  We're very excited today to be able to announce that Kodak's O-Photo service is launching today for Media Center, so that you now have the ability to go ahead and share your photos online as albums, directly with family and friends, over the Internet.

So here, for example, Bill, you can see my personal photo collection, my different photo albums.  We can go in and check out my friend's albums if we want to, and sharing is as simple as the click of a few buttons. So as you can see, we've dramatically improved both the music and the photo experience in Media Center, but we didn't stop there.

BILL GATES:  Yes, the third area, and a very important area is video.  With last year's Media Center we only supported a single tuner, and we didn't work through the whole chain to make sure that the quality of the TV experience was super, super-high all the time.  That was probably the biggest feedback we had, people wanted very high-quality video, and they wanted multiple-tuner support.  So we made that the top thing on our list that we've now built into 2005.

SEAN ALEXANDER:  That's right, Bill.  We're very excited to announce today that Windows XP Media Center Edition is the only product to support dual tuner, regardless of whether or not you have satellite, digital cable, whatever your cable connection is, it's built in, you can buy it at retail, and be able to enjoy this experience.  So let's go ahead and take a look at that.

I'm going to go into My TV, which is our home page for the TV experience, go ahead and select live TV.  One of the things I like to do in my house is maybe watch the news, and maybe to do a little channel surfing here.  "Mr. Rogers' Neighborhood," my son is a little bit young for this, but I win points with my wife when I do things like going ahead and recording TV programs that he might like.  So, with Media Center Edition 2005, we built in not only full personal video-recording support, so I can go ahead and pause, I can go ahead and play back at any point, I can skip forward, I can skip back, but with the click of just the record button, I can record any program that's on live, or in the future.

So, now you'll notice, Bill, if I go ahead and maybe want to watch the news, now that I'm recording that TV program for my son, all you have to do is flip the channel, dual tuner support is built in, and it automatically allows me to record up to two live TV programs at the same time.  (Applause.)

But we didn't stop there.  Because this is a PC platform, we also have the ability to provide for a great experience for finding what programs I might want to record.  So, we have a built-in programming guide with no service fees.  Think about that for a second, most personal video recorders that you buy today make you pay in excess of $140 a year just in order to get the program guide and a couple of additional features.  With Media Center Edition, it's all built-in.  And look at that performance, Bill.  You won't see that on any cable box.

BILL GATES:  Great job.

SEAN ALEXANDER:  So, we have up to 10-days, excuse me, 14-days worth of data in there, and we can go ahead and set it to record programs at any time.

BILL GATES:  What if I wanted to find a movie; can I do that?

SEAN ALEXANDER:  Sure.  We can find a movie really easily in Media Center 2005.  So, actually before that, what I would like to do is take a second and talk a little bit about how we're taking TV to the next level with high-definition support.

Now, we're very excited today to announce that Media Center Edition 2005 is the first consumer operating system with built-in support for high definition.  (Applause.)

BILL GATES:  High definition is a really exciting thing, and we think high definition is going to be absolutely mainstream.  In fact, when you look at the clips that we recorded here last night, you can see why, once people have high definition, they want all their video to be in that format.  So, it's actually a third tuner that, just like the other two tuners, you can watch, you can record, total flexibility with high definition.

SEAN ALEXANDER:  That's right, Bill.  So here, for example, a case scenario for me.  My wife loves the show "LEX,' I love the show "CSI:  Miami," they're both on at the same time on Monday, but now I have the choice to be able to say, I want to record it and enjoy it in high definition.  Let's go ahead and take a look at it.  (Video shown.)

What do you think of that?  (Applause.)  Crystal-clear digital quality, Dolby Digital Surround Sound, full personal video recorder, and programming guide support all built into Media Center Edition 2005.

But that's only one way that we can go ahead and experience movies and television with Media Center Edition.  We want to take it even a step further still, and that's with a totally unique feature that's not available anywhere else.  And, Bill, I know that you're a big movie buff, right?  That's right.  So, we have a new service that's built into Media Center called the Movie Finder Service.  It's basically like having a video store built into your Media Center experience, and it intelligently looks at all the TV programs, all the movies that are available on your line-up, and shows you just the movies that you have available to you in that particular line-up.  You see that has my movie poster art.  I'm able to browse through just as if I was at a DVD rental store.

Now, Bill, I'm a pretty big fan of Steven Spielberg and "Raiders of the Lost Ark," so I'm going to go ahead and select this program.  And all I have to do is go ahead and hit the Record button, and I can go ahead and record this movie.  Any time it shows up, the next time it shows up on my line-up, it will automatically be recorded to my hard drive.

We wanted to take it a step further, basically make it a full movie encyclopedia service built directly into Media Center Edition.  You'll notice I have the ability to go ahead and drill in, select cast and more, and here we can see the full credits for actors, and both the director that were in this movie.  Now, I'm a big fan of Steven Spielberg's, so all I have to do is go ahead and click his name, and here I can see the entire list of movies that either Steven Spielberg had directed or been involved in just as easy as that.  It really takes the work out of playing the "six degrees" of Kevin Bacon.  (Applause.)

BILL GATES:  One element of our approach I think is very important because it's very explosive is the idea of having Media Center be a platform, being able to pull in lots of partners.  We saw that with the music player, with the mall, that's going to have more and more partners.  We saw with the photos, Kodak coming in as an early partner.  But here, too, with the video experiences we've gotten partners.

SEAN ALEXANDER:  That's right, Bill.  In fact, right here in the movie service, you'll notice that we have this option down here at the bottom to go ahead and purchase a movie right from within Media Center.  And with our partner Movie Link, I can have a true movie on demand service, rent the movie online, download it, and enjoy it in the comfort of my living room.  (Applause.)

BILL GATES:  Let's take a look at other places where we've gotten partners.

SEAN ALEXANDER:  Sure.  Let's take a look at the Online Spotlight Guide that we have for a number of different services that are designed to work great with Media Center Edition 2005.  In fact, you'll see a number of different partners here that we're announcing today with services that are optimized, again, for that 10-foot experience, and easily controllable with a remote control.

Now, Bill, I'm a big fan of NPR Radio.  On Sunday mornings I like to go ahead and make buns for my family.  And one of the things that was difficult for me is, my son tends to get up around 6 o'clock in the morning.  So the radio programs I want to listen to on NPR don't necessarily correspond to that schedule.  So, one of the things that NPR has done here is enabled a true radio-on-demand service.  So, I can select any radio program on the NPR line up that's available here today, and select just the stories that I want to listen to, add them to my playlist, and get a truly personalized radio experience, all on demand and available today.  (Applause.)

SEAN ALEXANDER:  But we also wanted to take that even further into the TV experience.  So, you'll notice here that we have two great new services which are launching today from MSN, starting with MSN TV Today.  So, I can have a true on-demand television experience right here from within Media Center.  I can access a wide range of different programming, news, weather, sports, entertainment.  Dateline NBC has exclusives here, I can catch up on the news, build a playlist, and enjoy interactive television on demand right from within Media Center.

So, that's one example, but we also have another example here.  And we're very excited today to talk about MSN Music inside Media Center Edition 2005.  So, what I've ‑‑ 

BILL GATES:  It looks like somebody is communicating with us.

SEAN ALEXANDER:  That's right.  It looks like my friend Queen Latifah is backstage, and she's actually showing us the 10-foot experience for Messenger in Media Center here today.  So, you notice, I picked up my wireless keyboard, and I can go ahead and chat with her.  So, let's say, come on out.  And you know, Bill, my niece loves this feature because she can be on MTV, she's chatting with her friends, or watching music videos with her favorite programs all at the same time.

BILL GATES:  Kids love instant messaging, and it's great they can get it in the 10-foot experience.

SEAN ALEXANDER:  Exactly.

BILL GATES:  Well, I think Queen Latifah volunteered to help us show the 10-foot music experience, so let's welcome her to come on out.  (Applause.)

QUEEN LATIFAH:  Hi, hey.

BILL GATES:  Queen Latifah, welcome.

QUEEN LATIFAH:  How are you doing?

SEAN ALEXANDER:  You're in good hands here.

BILL GATES:  We've also got Hadi Partovi who is in charge of the MSN Music Service.

QUEEN LATIFAH:  Yes, did you get my message.

BILL GATES:  Yes, that was cool.  What are you up to?

QUEEN LATIFAH:  Just hanging, you know, kicking it, typing a little bit, ordering some music, some movies, playing with my new [Media] Center that you gave me.  OK, you didn't give it to me, but that was my ‑‑ you know.

BILL GATES:  We'll get you one, that's the deal.

QUEEN LATIFAH:  You heard that.  I have a thousand witnesses.

BILL GATES:  So, how is your latest movie and music going?

QUEEN LATIFAH:  Well, everything is going great.  I have a new CD in stores called the Dana Owens Album, and it's jazz, and it's soul, and it's hop.  It's really good, it's music from the '20s through the '70s that I've covered, and things that I love, and things that I'm sure your parents, my parents love, and everybody should get into in the crowd.  And, of course, I've got a new movie out called "Taxi" that's kind of ripping it up a little bit.  I get to play a New York City cab driver with sort of a NASCAR-style taxi with Jimmy Fallon, and it's kind of some bank robberies, so it's fun.

BILL GATES:  I think we have all those things here on Media Center.  Let's go ahead and see if we can find the music.

QUEEN LATIFAH:  Yes, let's find the music.

SEAN ALEXANDER:  Let's pick out the new album.  So what we're going to show you today is the MSN Music on the Media Center.  Today we're announcing for the first time MSN Music is available from your living room, so we're making it easier than ever to download music.  So, I can just click right there, and go right into the Media Center user interface.  I can see different artists and songs.  I'm going to go right to the browse by genre, I can look at alternative music, you know, classic, Sinatra, soundtracks.

QUEEN LATIFAH:  Hey, who is that?

SEAN ALEXANDER:  There's Queen Latifah.

QUEEN LATIFAH:  She's sexy.

SEAN ALEXANDER:  It's very easy, I can click right in there.  There are the top albums in soul R&B, Queen Latifah right there.  I'm going to click right in, you can see the list of songs on the albums.  I'm going to listen to one of these songs.  (Music played.)

Shall we buy the album, Bill?

BILL GATES:  Sure, let's buy the whole album.

SEAN ALEXANDER:  I'm going to click.  If you notice, it's just that purchase, I just clicked it once, and the album is downloading right now to the Media Center.  It's going to be in your music library in just moments.

The other thing we can do is, if you like this album and you want to find other music that you might like, it's very easy.  I'm going to go to the artist page for Queen Latifah, and this shows all of Queen Latifah's artists.  You can see on the right-hand side there's a link that can show you similar artists.  I'm going to click up here to see the Queen Latifah fan favorite radio station.  This will basically play a radio station of music that other people who like Queen Latifah's music, you know, if you like Queen Latifah, you'll also like some of these songs.  It's a great way to discover new music.

QUEEN LATIFAH:  Right.

SEAN ALEXANDER:  Now, it's actually fetching the music straight off the Internet, and it's going to stream it as a radio station.

QUEEN LATIFAH:  Oh, wow.

SEAN ALEXANDER:  There it is.

QUEEN LATIFAH:  That was pretty quick.

SEAN ALEXANDER:  And we can buy the songs right off the radio as well.  If you hear the song and like it, you guys like it?

QUEEN LATIFAH:  I like it.

BILL GATES:  Sure.

SEAN ALEXANDER:  All right, I click to buy it, the purchase is downloading right now.

QUEEN LATIFAH:  Bill, you liked it?

BILL GATES:  All right, I'll give it a try.

SEAN ALEXANDER:  A good song.  And there we have it, you can download music very easy, just the remote control, listen to radio stations, discover new music, download it with a click, and because of the really generous life of MSN Music, this music can now play on this computer, and in every room in your house, and on all of your portable devices as easy as that.

BILL GATES:  Well, Queen Latifah, it's great to have you here.

QUEEN LATIFAH:  Thank you so much.

BILL GATES:  Your new music sounds super.

QUEEN LATIFAH:  It's been a pleasure, enjoy it.

BILL GATES:  Good deal.

QUEEN LATIFAH:  Fantastic, I love it.  Take care, everybody.  (Applause.)

BILL GATES:  Well, Queen Latifah isn't the only one we're working with, we're also working with the king of microprocessors, Intel.  And so I thought I would show a short clip to talk about the things that Microsoft and Intel are doing together.  They're a very critical partner.  (Video shown.)

We haven't completed yet getting all of our media experience in every part of the home.  Sean is now over in the bedroom and he's going to show us a couple of additional ways that you get it wherever you want it.

SEAN ALEXANDER:  That's right, Bill.  Bill, I'm watching a movie on Cinema Now, it's pointing back on Media Center Extender device.  So, you notice I don't have a Media Center PC here in the bedroom.  I actually have a device called the Media Center Extender from Linksys, which enables me to use my Media Center PC as a hub for whole home entertainment, and turn any TV in the home into the complete Media Center experience.  All of my photos, all of my music, all of my video, even live TV, all here via wired or wireless home network.

So, let's go ahead and take a look at this.  Bill, one thing I want to note here is that this extender is actually connected back to the HP Digital Entertainment Center that we had in the other room.  So at the same time that you're downloading music and enjoying the experience with Queen Latifah over there, we were able to go ahead and playback a movie, able to do whatever I want to on multiple TVs around the home.

So a  couple of things that you'll note here, I have the full TVR experience here with Media Center, as well.  I can go ahead and pause live TV at any point, I can go ahead and record.  I don't have a tuner built into the Media Center Extender, it's using the tuners that are built into my Media Center Edition PC, and allowing me to control them remotely over the home network.  But, again, it's the same simple, familiar experience that you have.  You don't have to learn a new UI.  It's all the same as what you would see on a Media Center PC.

So here for example, I have some photos that I took on a recent vacation to Hawaii.   That's actually my grandfather and my son.  I also have the ability to go back in and select music here, as well.  We can go ahead and play back all the music that's built in, again, it's playing back from my Media Center PC, select any one of the tracks that I have here.

So for example, again, that same track that I downloaded from MSN music, or any of those services, I can go ahead and play back in any room in the home, the complete Media Center experience.

Bill?

BILL GATES:  The Media Center Extender we're seeing there is a dedicated box, and that's a great way to get Media Center into new rooms.  We have another way of doing it, though, which is to use Xbox.  This shows the way we're thinking about all the different Microsoft related products coming together.  What happens here is that the Xbox itself runs the Extender software.  So you just buy the add-on kit we've got here, it gives you the universal remote control, and as soon as you set that up, you're connected up to Media Center.

Today there's over 15 million Xboxes out there all ready for this.  Over a million of those are already connected to broadband, using Xbox Live.  So the addition of the remote control means that now they're more than just a game box, they're an extension of all your media capabilities.

SEAN ALEXANDER:  That's right, Bill.  (Applause.)

BILL GATES:  So we've gotten our media into rooms with speakers, and rooms with screens.  We've gotten it into our pocket for music.  What about video when I want to leave the house.  What have we got for people there?

SEAN ALEXANDER:  Sure, Bill.  We've got two great ways to be able to experience digital media on the go, and get your complete entertainment experience.  The first way is with a Tablet PC, and Windows Media Player 10.  I can take all of my content, my recorded TV, my videos, my photos, of course my music, and be able to experience it on the Tablet PC, both high-definition with certain models, as well as, of course, standard TV.  And I don't know about you, Bill, but when I'm taking long flights, it's great for me to be able to take my Tablet, flip around the display, and be able to have a personal viewing experience while sitting in coach.

BILL GATES:  Yes, Tablet's a ‑‑ wherever you want to sit ‑‑ what if I want something that's small, or something that the kids might have?

SEAN ALEXANDER:  Sure, Bill, that's where the Portable Media Center comes into play.  Portable Media Center launched last month, and we have partners, Samsung, iRiver and Creative offering devices which take the complete and familiar Media Center experience with you on the go.  I can take my recorded TV, my music, my videos, my photos and, again, use the same familiar experience.  I can sync it with Windows Media Player 10, or the experience works even better with Windows XP Media Center Edition 2005.  Just cradle the device, everything it taken care of, I actually can sync it using the convenience of my remote control, and I'm ready to take it on the go.

But, Bill, we wanted to make it even easier with the Portable Media Center.  We recognize that a lot of consumers don't want to, for example, give a tablet PC to their kids.  So in my particular case, my wife, I had to buy her her own Portable Media Center, because when she takes trips with my son she wants to be able to enjoy TV, for example, when she's flying.  But, we know that there are a lot of families out there that take road trips.  So we wanted to make it really easy with Portable Media Center to be able to connect to the wide range of digital entertainment systems that are being built into cars, such as minivans and SUVs today.  So I'm very happy to announce the Portable Media Center plugs directly into those DVD entertainment systems that are built into so many of those different vehicles that are available today.  So to help us in demonstrating that today, I'd like to ask my niece Cassie to come on out, and she's going to show us just how easy it is with this Chrysler minivan.

CASSIE ALEXANDER:  Uncle Sean, thanks for setting up my new show for me.

SEAN ALEXANDER:  No problem, Cassie.  Can you show us how easy it is.

CASSIE ALEXANDER:  Sure.

SEAN ALEXANDER:  DVD entertainment in the car, as simple as that.  (Applause.)

BILL GATES:  That's great, Sean.  You've shown us the media everywhere we might want it.  That's really making the vision come true.  Thanks.

SEAN ALEXANDER:  Thanks, Bill.  (Applause.)

BILL GATES:  I want to re-emphasize two things that allow this whole ecosystem to come together, one of them is the PlaysForSure logo.  We are registering those devices on a PlaysForSure Web site, Playsforsure.com, so you can always make sure you've got something that fits in there.  We also have a broader marketplace we call the Windows Marketplace, and this is a place for us to make it easy from any Windows PC to go out and see what extra software or hardware you might want to get.  Together with partners we've got over 90,000 products listed up there, and so we think that's a great way of letting people get even more out of their Windows PC than they do today.  They'll be able to see what's the latest and greatest, what's selling well, what's rated well, on many of those things they can just download exactly what they want right there.

A particular group of partners that's important to us are the people making the PCs and the other hardware.  And one thing that's great about those products is they improve so rapidly, the screens, the performance, the capacity, the styling.  We've put together a little video that shows all the different things that the OEMs are thinking about, and their incredible support for what we're doing here.  (Video shown.)

I hope you've gotten a sense of why we're so excited about what we're launching today.  This is the day when we're bringing digital entertainment anywhere into the mainstream.  And our partners are very excited about that.  The people who have used the previous versions are very excited about that, the fact that they'll be able to get the upgrades with these new capabilities.  This is just going to create a phenomena that will build on itself.  Almost every element of what you've seen here will continue to improve.

The number of homes that have broadband, the power of that broadband connection is just going to go up all over the world.  The ability to distribute media inside the house, you can do that on a wired basis, or more and more on a wireless basis, and making that easy to set up, and making it work, even with video, high definition video, that's just getting better and better.  The music player devices, the digital cameras that acquire the photos.  The phone, some of those phones will even have hard disks in them, and connect those things up, as well.  So all these trends are coming together.

One of the key partnerships for us is working with the media companies, encouraging them to have the widest range of media content available.  Getting more movies out, getting high def movies out, getting them out even earlier.  Looking to have even new types of entertainment that use the interactive power that we have here with the PC.  Just take the idea of news.  You can personalize the news based on someone's interest, show them exactly what they care about.  The power of software combined with media creativity is something that we're just at the very beginning of.

What we've got here is an ecosystem.  It's got a platform, it's got partners, and it's got lots of choice, it's not just digital music, but digital media.  It's not just one store, but lots of stores, with different capabilities.  It's not just one device, but all the different devices you might want to have now and out into the future with compatibility.  It's not just buying content, but also opening up the subscription, including being able to use that on the portable devices.

We want to make this simple, and we want to make it far simpler than analog entertainment has ever been, and bring with it all of this power.  So our commitment is to keep improving the software.  We've increased the R&D we put behind this.  We see no limits to where it can go.  In fact, some day these devices you won't just use the remote control you'll be able to talk to the Media Center, using speech recognition we're doing, or you'll have a camera with the Media Center that we'll know who in the family is there, and we'll use that to automatically suggest the things you might be interested in.

Today is just the beginning.  I'd encourage you to all go out to the partner pavilion and see all the different products they've brought together.  We're very excited that you came, very excited with the support we have from the partners, and let's all enjoy using digital entertainment anywhere.

Thank you.