Chips, the Sequel
Intel woos Hollywood and nurtures the new-media
By Karen Kaplan, Times Staff Writer
Los Angeles Times, April 27, 1998
Plenty of others before Intel Corp. have come to Hollywood seeking
fame and fortune.
Of course, the Silicon Valley behemoth already has plenty of both--its
microprocessors run about 85% of all personal computers. But with
an ever more powerful line of Pentium processors and a voracious
appetite for new markets, Intel is hoping to improve on the record of
such Tinseltown darlings as Silicon Graphics and Apple Computer by
nurturing the fledgling new-media industry.
The Santa Clara-based company has courted such key institutions
as the American Film Institute and the Academy of Television Arts
and Sciences and outfitted with free PCs influential training grounds
like USC's School of Cinema-Television and the California Institute of
the Arts. Intel has also invested in many of the Tech Coast's most
In fact, Ron Whittier, Intel's senior vice president and general
manager for content, has become so immersed in Hollywood culture
that he even scored tickets to the Academy Awards last month.
"It's quite a show," Whittier said. "I'm sure all of that was being driven
by Intel architecture."
Whittier was kidding about the Oscars--but not about the company's
overall strategy. Its efforts to woo important members of Los Angeles'
entertainment and new-media scene have been focused on a
single-minded goal: to sell more microprocessors.
"If we could get a fraction of the entertainment industry embracing
technology, we think we could build some very exciting products
together," Whittier said.
"Obviously, it would be good for the entertainment industry's
business, and selling a whole bunch of high-performance digital
platforms for consumers would be great for Intel."
That strategy has led the chip-making giant to sink millions of dollars
in Southern California start-ups. Intel won't say how much of the $750
million it has invested in more than 100 companies across the
country has gone to local entertainment firms, but it has surely been
enough to make Intel one of the area's biggest venture capitalists. No
other company that can afford to make so many long-term
investments--such as Microsoft Corp. or IBM Corp.--has targeted the
entertainment industry with such intensity.
Equally important, beneficiaries say, is Intel's sharing of technical
expertise and the loan of engineers to help the people who make
entertainment fulfill their vision of a digital future.
"The money is not the key thing in the relationship," said Richard
Baskin, co-chairman of Santa Monica-based Intertainer, an
Intel-backed start-up that aims to deliver movies, television shows
and music to PCs. "Having the benefit of their thinking and knowledge
and experience is far more valuable than the dollars they invest --
although we're happy to have the dollars too."
Intel's adventures in Hollywood began in earnest in early 1996, when
the company decided to build a state-of-the-art multimedia lab at the
top-tier talent firm Creative Artists Agency. The CAA lab was
designed to show the creative community what computer technology
could do--and to encourage it to create content worthy of its potential.
"This is a showcase for the best-of-breed technology in the content
space," said Sriram Viswanathan, director of Hollywood and talent
programs for Intel's content group, who used to run the lab.
The lab offers Intel's vision of the PC-centric future, when a single
computer is used to play video games, check TV listings, order
movies on demand, surf the Web and even buy concert tickets.
The people who will turn these visions into hardware and software are
spread throughout Southern California, and Intel is pairing up with as
many of them as it can.
For example, when Intel was looking for a partner in the music
business, it invested in Launch Media, a Santa Monica company that
produces an interactive music magazine distributed on CD-ROM.
Soon after, Intel featured Launch magazine in a television commercial
and began helping the company integrate Web-based interactive
elements--such as real-time chat-- into the CD-ROM environment,
Launch Media Chief Executive David Goldberg said.
The top brass at Ticketmaster turned to Intel for help in improving the
company's Web site with three-dimensional graphics, push
technology and personalization software to boost online ticket sales.
Both companies will share revenues from the site, said Ticketmaster
Chief Executive Fredric Rosen.
"What they saw in us was a consumer product that anybody could
understand that would propel usage of the Web," Rosen said.
Showcasing the potential for PCs to become everyday entertainment
appliances-- especially ones that offer new ways of making money--is
a key part of Intel's campaign to woo Hollywood. Without a clear
business model, entertainment companies aren't willing to take the
risk, Viswanathan said.
Intertainer is counting on subscription fees and commissions from
online shopping to make its entertainment content service pay off,
said Baskin, a composer and producer who met Intel Chairman
Andrew Grove last year at the lab at CAA, where Baskin is a client.
Intel's engineers are working with Intertainer to develop technologies
ranging from video chat to set-top boxes for TVs, Baskin said.
"We're like a little R&D division for them," he said. "They get access
to unusual thinking that they wouldn't get on their staff."
Intel is also keeping an eye on the bigger picture via partnerships with
key universities and entertainment institutions. The goal is to blanket
Hollywood's up-and-comers with Intel technology so they'll use it the
rest of their careers.
One of the biggest beneficiaries of this strategy is the California
Institute of the Arts, the Valencia school that trains students in film,
video, theater, music, art, dance and graphic design. Intel has
pledged to upgrade the entire school to state-of-the-art PC
technology, said CalArts President Steven Lavine.
"If you want a big brother in the world, Intel is the one you want to
pick," Lavine said.
Intel will also outfit USC's School of Cinema-Television with a
cutting-edge animation studio, said Vibeke Sorensen, a USC
professor who chairs the division of animation and digital arts.