Microsoft, Intel push into living room

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Digital media centers have been on the market for a couple of years, but they are far from a fixture in the American living room. Microsoft and Intel teamed recently to convince consumers that now is the time to invest in one box that serves as both a personal computer and TV.

"The industry has been relatively poor at explaining what a digital media center is," said Roger Kay, VP-client computing at IDC, a technology market research company. Microsoft and Intel's task is not only to place a clear and memorable explanation in the consumer's mind, but also to make consumers want to handle all their digital tasks from the living room couch. Success for Microsoft and Intel depends in large part on its Web site (digitaljoy.com). Interpublic Group of Cos.' Deutsch, which handles the campaign, said that because the concept of a PC as the hub of a home's electronic entertainment is fairly new to buyers, the Web site is crucial to explaining and demonstrating the fun and efficacy of the product.

demonstration required

"The big hurdle is that people have a perception of how they consume their entertainment and use their PC," said Sean Connolly, worldwide advertising manager at Intel. "It really requires demonstration-you really have to see it to believe it. That's why interactive demos play such a big role."

"Not only are we selling this computer, we are selling a change in lifestyle," said George Decker, VP-associate creative director at the interactive arm of the agency, iDeutsch.

The effort's TV, cinema and online ads are crafted mainly to spark curiosity and drive viewers to the Web site. (Demonstration centers that actually assemble a media center in a living room have also been set up in 38 malls and other public locations.) The marketing budget is $14 million, $10 million of which is for TV, according to someone close to the campaign.

But whether the Web site is effective at getting across the "joy" and how the products work will be determined by holiday sales results. At the moment, though, some analysts are skeptical.

"The problem is to truly experience it, you need a home media center," Mr. Kay said.

The core of a media center is essentially a PC with a TV tuner in it. Microsoft provides the operating system, Windows XP Media Center Edition 2005. Intel's Pentium 4 processor provides technology that allows multiple processing threads so the user can perform many different actions, including viewing home videos, sorting photos, downloading and playing music and recording, and stopping and skipping through TV programming.

In addition to showcasing all the products that comprise a media center, the site demonstrates how to use them and presents various configurations.

The site has problems, starting with the URL, charged Rob Enderle, principal analyst at emerging technology research firm Enderle Group. "The thing is called a media center, so why come up with `digital joy'?" he asked.

Mr. Enderle's main problem with the site is that in showcasing all the elements through so many different menus and tabs, it accentuates the complexity of a media center. "It's like showcasing a car as a complex machine, walking people through the disk brakes and the exhaust system," he said. Apple put forward a new concept-the iPod-to consumers by showing people enjoying the product, not pushing a tutorial. "The campaign generated a ton of demand and people bought the product," Mr. Enderle said.

Deutsch counters that digital joy defines the mindset the marketers want the consumer to have. Also, the agency said the promotion is targeting people who are already users of digital products, so they won't be averse to the site's complexity. Over 70% of the target audience have broadband, already own digital devices like PDAs, MP3 players and digital cameras and plan to buy a PC within the next six months.

A lot is at stake for Intel and Microsoft because consumer desktop PCs have reached maturity, analysts say. Neither company's executives would say what the response rate has been since the Nov. 7 launch.

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