Gambling on the Webcast

Can a Microsoft veteran make the Digital Entertainment Network sing?

Published October 11, 1999 4:00PM (EDT)

Hollywood's best-funded and most controversial online entertainment start-up needed a new chief technical officer -- someone who could strengthen its management lineup as it heads into what will be a closely watched IPO. When the Digital Entertainment Network (DEN) tapped Greg Carpenter, 37, for the job in August, it recruited someone who brings more than just streaming media expertise to the table.

A tech-head who has long worked at the edge of new developments in broadband and the digital distribution of music, the Indiana-born Carpenter is also a former aerospace engineer, pro golfer (2 handicap) and Hollywood raconteur who palled around with Arsenio Hall and Jim Carrey at the Comedy Store in the mid-1980s. Not only that; he's a part-time hog farm flooring manufacturer. ("There's more technology involved than you'd think," he says.)

During his six years in Redmond, Carpenter was a key figure in Microsoft's effort to develop Internet tools. His job was to get the moribund interactive television group "technically geared to the Internet delivery space."

He also served as an unofficial liaison between the "tech-speak and creative people" at the Microsoft Network, and worked his Hollywood connections to recruit TV producer Joel Silver, Warner Bros. and Paramount as partners for the Internet Explorer 4.0 Channel Bar. Last year he created and led the Windows Media Player marketing group in its drive to dominate the field of streaming media.

Carpenter's new employer, DEN, in Santa Monica, Calif., aims to create a major entertainment brand for 14- to 24-year-olds. DEN presents niche-specific streaming video shows like "Redemption High" (Christian teens), "Tales From the Eastside" (young Latinos) and "Aggronation" (extreme sports fans).

The company filed papers on Sept. 17 for a $75 million IPO and announced plans to use $17 million of the proceeds to build a new online music business, in which Carpenter will play a key role. Carpenter, a big disco fan, has musical tastes that run to '70s mainstays like Heart and Foreigner. "My 8-track still works fine," he says.

You've spent years working in the "tool" business. What compelled you to leap over the fence and go work for a content company?

I've been told my personality is more in tune with [the personalities you find in] the interactive entertainment space. Part of the reason for that was the friends I had in L.A. in the mid-'80s, "nobody comics" like Robin Williams, Jim Carrey and Pauly Shore. (They've since percolated upward.)

Also, Microsoft was a smaller company six years ago than it is today. The vibe has changed. I was comfortable and challenged, but I missed the start-up mentality -- the drive to do something new.

Obviously, you felt confident enough about the Web's potential as an entertainment medium to join an online entertainment start-up. You must know that skeptics abound, and many don't have a high opinion of the entertainment stuff they've seen so far on the Web.

With the introduction of any new medium there is a transition period where people aren't sure what to do with it. The classic example is the transition from the stage to movies. Early film makers shot movies on a stage with curtains in the frame, just as if it were a play. Eventually, people figured out that movies didn't need stages anymore. I think the Internet is following the same path.

Just as with early films, programming folks are treating the Web as if it were a television set. There are tons of things that can be done in Web-based entertainment that aren't really possible in niche media like film, TV or print. At DEN we are creating an integrated, immersive experience that crosses text, graphics, interactivity and video in a unique way. I see rapid growth in the medium and associated technologies that is going to make Web-based entertainment much more engaging over time.

Your last position at Microsoft was director of marketing for Windows Media technology. How does it feel now to be working for a company that is, on the face of it, technology agnostic -- and worse, where Apple's QuickTime is the preferred player among visitors? Any pangs to push Microsoft technology?

No. My R&D group developed the first Linux QuickTime streaming server. It's more about trying to meet the needs of the audience and what they have. QuickTime is marginally more popular, but I wouldn't say it's rockin' above the Real Player or Windows Media.

Which player gives the best quality experience?

At lower data rates the Real player is in last place and QuickTime and Windows Media are similar on quality. At full frame rates and high data rates there isn't anything better than Windows Media. At one of the meetings I had at Microsoft we demo'd a 300k stream at full screen. Bill Gates looks at it and goes ... "Wow." The impression in the past was that you couldn't get that kind of experience until you got to 700k or beyond the low-end DSL modems. The reality is that we're getting pretty darn close. In two years, you'll be able to get a TV quality experience with a 300k stream.

Some have accused DEN of not having a well-articulated broadband strategy.

That is an extremely false impression. We have an extremely good broadband story. Because of the way we do the physical production, low-bandwidth 56K connections actually look better on our site than on some other re-purposed video sites. All our producers have to adhere to a style sheet, a set of production guidelines involving colors, patterns, motion-in-and-out of camera, right-left as opposed to left-right motion -- all kinds of things that make a big difference in terms of compression at lower data rates. When you scale that up to 300K you have that much more headroom for broadband interactivity, alternate video streams and all the other things that make for a rich experience. Our broadband experience is better because of all the hard work we've put in at the low end.

DEN is building an online music business called ">en." Is the fear that MP3 will cannibalize CD sales justified?

I don't have an MP3 player in my car -- nor do the bulk of the cars on the planet. Until there is a ubiquitous medium for transferring music from place to place, you're still going to derive tons of CD sales off the promotional angles of the music you distribute on the Web.

There are still many companies that are afraid to put music up for general download because they're afraid of losing control. DEN's philosophy is just the opposite. There are promotional songs that we'll put up that have no protection. People will just take them. We want to encourage that. The more people who sniff up that stuff, the better, since we're targeting breaking bands and distribution is the key. If we started with bands like the Beastie Boys that already have an established audience, then it would be a different dynamic.

What is DEN's new music business going to look like?

When you come to our site, you won't find a music button that you click and get the MP3 music experience. There are plenty of opportunities to highlight music across the DEN network, especially for our 14-to-24 target audience, since music is a key part of their culture. We may use a song in a show, or feature members of the band as performers. You might see a Limp Bizkit doing a "Rated DG" episode. There will be listening areas where you can get the stand-alone music experience, or buy the CD. The whole DEN music promotional package will be woven throughout the network.

What is the Holy Grail for the online music business?

The "juke box in the sky," as my friend Sam Anderson at Microsoft used to refer to it. There's enough spectrum floating around that if you had a box with a very simple interface, really only a playlist, you could say you want to play such-and-such a song, punch in a code and pull it out of the air -- at any point, any time.

Several developments are coming that will allow that kind of capability. Two companies in the past year have done deals for distributing music via satellite. Also, with digital television coming on strong, there's going to be the ability to transmit a lot more data. You may be sitting at your PC and (assuming it's affixed to a DTV-receiving antenna) get everything that Led Zeppelin has ever done in a single transmission.

Jim Banister of Warner Bros. Online is an advocate of WebDVD hybrids, what he calls "broadband in your hand." WebDVD is a strategy where you put most of the fat video elements on a DVD and ship it to the consumer, who uses the disk to have a seamless MPEG 2 experience integrated into their Web activities. Are you considering this approach?

No question, the WebDVD experience is awesome. The issue is that WebDVD is a two-step process. The downside is the extra step involved -- content acquisition. A consumer either has to go out and get it, or you have to carpet-bomb them with DVDs. I'm not discounting the strategy. We may decide in the future to pre-populate PC's with our video content, so that it comes with your lovely Dell box.

Some people believe that online entertainment won't be compelling until we have full screen, full motion video delivered over the Web.

We don't believe that a complete full-screen video experience is the way to go on the Web. A quarter-screen video with a bunch of nice, interactive stuff offers a different experience. The interactive elements are really key ones for the audience we are after. This 14-to-24 aged audience is the first group of people that have had access to computers their whole lives. They're mouse freaks -- they click on everything. When you put little unmarked bugs on the site, these people find them. If you want a full-screen video experience, go to your television or rent a DVD -- don't sit at your computer.

What is your greatest fear?

Success. If you are successful in a business that relies on streaming media, your success breeds infrastructure problems. The producers of the Victoria's Secret Webcast claim that millions of people saw the show. What most of those millions saw was video-on-demand, not a live webcast. If someone were to draw 100,000 users simultaneously streaming the same Webcast ...

It would bring down the network?

Right. Until multicasting gets enabled across the Internet, there will be bandwidth and scaling issues.

How long will that take?

Five years. Router configuration is the biggest hurdle. We're working on an old network: The more people that get connected to the network, the more routers. Every router that the content flows through has to be multicast-enabled -- and not all routers are configured that way. Some networks, like UUNET, have large multicast-enabled pieces, but the general Internet that comes into people's homes has big chunks that need to be fixed. The sheer volume of routers on the planet means that it will take a long time.

What interim kinds of changes in network architecture are being taken to increase network capacity?

If a consumer in Miami has to go 17 hops across the Internet to get to a data source in San Jose, you can't stream to him at a very high data rate because the network doesn't support it. The key is putting your content out on the edge of the network, so that somebody in Miami has only one hop to get to their content. The buzz word in network technology over the next year will be "distributed architecture" -- getting your content out to the edge.

What is the one thing that consumers would be most shocked to learn about in this world of streaming media?

Most people don't have any idea the number of computers it takes to serve streaming video to an audience. You can maybe get 600 to 800 streams off a box at low data rates. Compare that to sites that get 40 million page views per month. It takes 15 to 18 servers just to service those little webcam-based sites like the Jennicam. I think a lot of people think streaming video works just like television: You just put one server up and people go get it.

By John Geirland

John Geirland is co-author of "Digital Babylon: How the Geeks, the Suits and the Ponytails Fought to Bring Hollywood to the Internet," to be published Sept. 1 by Arcade.

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