Microsoft, while owning the primary interface between humans and PC, has yet to create any product that is essential to the future of television, film, music, and entertainment. Some would argue that Windows Media is that product. I would argue that the MPEG family (i.e., MPEG-2, MPEG-4) will be a tough standard to overcome.

Microsoft looks to be entering the game, however- having recently announced a new software TV platform. The article (from the Mercury News) says: "The software, installed on both customers' set-top boxes and on computer servers at cable companies, includes applications for cable operators to create and deliver on-screen TV guides, movies-on-demand, and interactive advertisements for their customers...

The software is designed to help cable companies take advantage of the growing interest in ``on-demand'' services, which allow customers to order movies, special episodes or other programs at any time with the ability to pause, fast-forward and rewind."

This is another example of how technology companies can create wonderful business opportunities by enabling direct-to-consumer digital distribution for traditional media and entertainment businesses.

I can see Microsoft buying SeaChange in order to secure a human computer interface they have currently missed out on, even if the new software they announced proves successful. SeaChange owns 70% of the market and has some very interesting technology to boot.

At this year's NAB, at SeaChange's booth, I saw a demo of software, acquired in the acquisition of Digital Video Arts, that allowed cable operators to take a DVD, and encode this DVD once in such a way that audiences could view and browse the DVD from their living rooms via the set-top box using the same exact menus and graphics that were on the DVD one would buy. Compare that to the Enron/Blockbuster/nCube VOD system.

Additionally, Digital Video Arts was showing their VOD Link navigational tool. The tool allowed a network, say Discovery, to keep the audience in the Discovery family of networks, providing links to alternate Discovery shows, specials, VOD offers, etc...