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Chips, the Sequel
By Karen Kaplan, Times Staff Writer 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 innovative firms. 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.
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