Video Hall of Fame 2009 Inductee: Blair Westlake, Microsoft

This fall, Microsoft brought its video offerings together under the Zune brand, offering instant streaming and 1080p high-definition downloads through the Xbox, Zune HD portable and the PC. The company also allows consumers to move content between devices, a strategy that could boost its share even more.

Microsoft now has an estimated 31% share of the digital video rental market, second only to Apple iTunes.

Blair Westlake, corporate VP of Microsoft’s media and entertainment group, has led the software giant’s push into entertainment.

Studio execs call him a “bridge” between Hollywood and the tech industry, while within Microsoft, he’s known as a knowledgeable studio insider and savvy dealmaker willing to walk away from a deal if it’s not the right one.

“Blair Westlake is that rare executive on the leading edge who combines an up-to-the-minute understanding of digital technology with an insider’s knowledge of the Hollywood studios,” says Craig Kornblau, president of Universal Pictures Digital Platforms and Home Entertainment. “His ability to serve as a bridge between these two distinct cultures is especially valuable at a time when home entertainment is increasingly expanding into the digital realm.”

Westlake comes to the table with plenty of insider experience. He got his start in entertainment as a lawyer for Universal Studios’ theme park division. He stayed at Universal for about 20 years, serving in other positions including executive VP of the home entertainment group and chairman of the TV division before joining Microsoft in 2004.

Westlake says his move to Microsoft was “a natural evolution combined with a realization that the future of entertainment would be irrevocably changed thanks to the power of the Internet as a distribution accelerator.”

His understanding of the potential of the digital business combined with his studio background has given him an in with studios and made him a credible player within the broader digital business.

“Blair has a unique perspective about the business, having been at a studio for many years and now at Microsoft,” Paramount Digital Entertainment president Thomas Lesinski says. “He has built a significant bridge from Microsoft to Hollywood that has been mutually beneficial for both the IT industry and the studios. With Blair’s vigilant input and support, the trust and productivity between our two companies has grown significantly over the last five years. He is a valued partner and friend.”

At Microsoft, Westlake is the go-to guy for insights on the media and entertainment industry and trends in the business. He’s also involved in the company’s biggest video and music deals for the Xbox, Zune and Windows Media Center-enabled PCs.

“On our highest profile and most complex deals, Blair gets involved to help my team and I crack the toughest problems that are holding us back from closing,” says Ross Honey, Xbox general manager of content acquisition and strategy, who reports to Westlake.

One of Xbox’s savvier deals was the exclusive it brokered with Netflix to get the retailer’s popular movie streaming service on Xbox a full year before it was available on other game systems.

Netflix chief content officer Ted Sarandos says Westlake has been a driving force, “helping the studios look at different digital models and platforms. He is a great partner, and I am glad that our initiatives complement each other as much as they do.”

Within Microsoft, Westlake is known for his “approachable and transparent style,” and always being available regardless of the time zone he’s in; but he can also be a tough negotiator, adds Honey, who says Westlake made it known early on that Microsoft wouldn’t be a pushover.

“When we first started in this space, we received multiple requests for millions of dollars in upfront guarantees,” Honey says, “and Blair led the charge, saying, 'Hell no! Those numbers don’t make sense, and we shouldn’t have to pay them.’”

Honey says Westlake has walked away from deals that don’t pencil out. “Given Blair’s long reputation in the industry, the other side understood that he meant business, and more often than not, they came back to the table,” Honey says. And when they didn’t: “Blair will frequently say, 'Sometimes the best deal you do is the one you say no to.’”

But it’s the deals that Microsoft, under Westlake’s leadership, has said “yes” to that have reinvented the Xbox 360 from a game console into an all-in-one entertainment device and made the company one to watch in the digital space.

Westlake says one of the next big challenges for the industry is connecting various devices together so consumers can access content on any device they own, something Microsoft has been involved in through the Digital Entertainment Content Ecosystem.

In the shifting entertainment business, where cable companies are offering content online and digital retailers are offering movies and TV shows on the TV, Microsoft is aiming to reach an audience not served by traditional TV, Westlake says.

Microsoft wants to reach that audience through the Zune, the Xbox and increasingly, the mobile phone, which Westlake says will be a “critical part of our strategy as we serve content to people in a different fashion than a 10-foot, lean-back experience with remote in one hand, as many of us grew up doing.”

Westlake, like others, acknowledges that the digital business is still in its nascent stages.

“I don’t think new media’s promise to the consumer has been fulfilled yet,” he says. “People have to find more value in digital than they do with traditional models if they’re going to spend money on it. That means the experience has to be easy, and the technology needs to work seamlessly. I think the success of Xbox Live and Netflix is partially because we’ve made the experience so simple and logical for the Xbox audience. But I think we’ve just scratched the surface, and it’s our job as a technology company to address the need for simplicity and value.”