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JANUARY 8, 2004

© Copyright 2004 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.

Good afternoon. Thanks, and welcome.

For most of the past ten years, many of us would come to conferences like this and read words like that on the screen, and listened to some really visionary presentations about what was possible. And frankly, in many cases, many of us would think: baloney. We would be skeptical about what we were hearing.

And it wasn't for a lack of desire – all of us want and wanted to believe the digital revolution; we wanted to believe it was real, and all of us wanted to be inspired by the incredible promise of the digital future. But year after year, the reality of digital technology has failed in many cases to live up to the hype, and each of us has earned the right to be a bit skeptical.

But you know, a funny thing happened this year on the way to Las Vegas: the revolution actually got real. We have always had gee whiz stories when we leave CES; this year, we have gee whiz stories as we come to CES. Today, everywhere we look it's increasingly clear that we are entering an era where every process – every process – and all content is becoming digital, and mobile, and virtual.

Every time one of us walks into a Starbucks, hears a song we like playing over the sound system, pulls out a laptop, and downloads it wirelessly for less than a buck – the digital revolution is more real.

Every time one of us goes to a wedding and throws a digital camera and a printer into a bag, and shoots, and edits, and prints the images we like; and presents the bride and groom with a photo album before they leave their own reception – the digital revolution is more real.

Just think about the changes taking place with photography today. Photography used to be a physical, chemical, analog process. You took a picture, and something happened in your camera; you took your film to a photo mat, something physical and chemical happened; you picked up your film, you sorted your pictures – let’s face it, you threw half of them in your bottom desk drawer, and when you got around to it, maybe you mailed some of those pictures out, or maybe you eventually got around to putting some of those pictures into a photo album.

And today, digital photography is a digital, mobile, virtual process. You create digital content – a digital camera is a computer with a lens. And then you take that content and you network it, and you send it wirelessly, you edit it, you share it, and when you are ready, you print it. And every process – every process – is beginning to follow this same pattern: every physical, analog process will become digital, mobile, and virtual.

So in this revolution, what is HP's role? Our role is to drive that digital change in the home, just as we are doing for businesses – from the very smallest to the very largest. Our role for consumers everywhere is to democratize technology and empower digital revolutionaries everywhere.

You know, gizmos and gadgets are fun, but enabling the digital revolution takes much more than gizmos and gadgets. What matters now is making it all work together in a way that creates simple and enjoyable digital entertainment experiences at an affordable price.

What is HP's contribution? To apply our innovation and our systems knowledge to the digital entertainment realm.

Too many products still don't connect to one another; they don’t work easily together. Too few of us have access to broadband at home. Too many products still cost too much. Too much digital content is still being taken illegally, undermining business models and artistic integrity. In other words, issues of cost, and complexity, and connectivity and manageability still get in the way of simple, enjoyable experiences.

Now, much of the attention in this industry has been focused on the devices that we hold in our hands or hang on our walls, and not on the whole ecosystem around us. But trying to solve all of these challenges by focusing just on plasma screens or music players alone is like trying to tell the story of television by focusing on the TV set alone, or to tell the story of movies by focusing solely on the projector.

At HP, we don't believe the digital revolution is simply a shootout in gadget land, as one business magazine put it. We believe the real revolution that is taking place today is different, cutting far deeper and far broader than simply the devices that flew out of stores this past holiday season. We believe the true revolution that is taking place today is a revolution in the way that entertainment is created, distributed, managed and consumed. We believe that the true revolution is around the experience, and making the whole system come together – a whole system that requires an entire network of players and partners, from service providers, to media companies, to content creators, to online services and more – and all those players working together to deliver the best experience. In other words, the entire entertainment process, whether it's music, or movies, or TV or images, is becoming digital, mobile, and virtual.

Now, we know something about this market. We have more than 100 million consumer customers today. We touch 45 million consumers every month. In 2003 alone, we sold 53 million products to consumers – and I am not counting supplies in that number. And that means – the 53 million products sold in 12 months – that means that a consumer buys an hp product more than once a second.

We sit in 110,000 retail outlets in 176 countries around the world, in addition to our own online HP store. And in that last 12 months alone, we've sold forty three million printers – more than one of every two printers sold in the world. We've sold eight million PCs: desktops, handhelds, and notebooks. And every day – every day – more than 167 million pictures are taken using an HP camera. In fact, we shipped more than one million cameras last year alone.

And so today, I want to share with you how we use our scope and scale to tell you our story: from creation, to distribution, to consumption; to describe with some of our great partners in this industry how we are using our assets to make a difference in music, in movies, in your living room and beyond; to show you what specific offerings we're creating to deliver simple, rewarding experiences that bring the digital revolution to your life now, and over the next 18 months.

So, let's start the afternoon by talking about the place you spend most of your time enjoying your music, and your movies, and your videos – and that’s your home. HP is working today to organize all of your digital content in one simple place in your home, with you – you – at the very center of the digital experience. We're not just designing specific components or specialty items; the value we plan to bring is not just individual gadgets, but a whole system.

To tie everything together today in one system means many devices, miles of cable, half a dozen remotes, hundreds of pages to read in manuals, and by the way, today realistically, good luck getting it all to work right. Let's face it, most living rooms today are desperately in need of a makeover.

So we asked the question, wouldn't it be great if all of that functionality and content worked together seamlessly? Even people who work in the television industry are digitally challenged. Let's take a look at what your living room could look like next Christmas. [Video plays]

That was fun, and wouldn’t it be great if everyone could get a little digital makeover session with Carson?

This week, you have heard several different, very compelling visions of how digital entertainment is going to be moved into your living room. Intel talked about using new chips to bring this technology to the living room. Microsoft talked about moving the PC to the living room and connecting it through the house. And others talked about all the new digital gadgets that will be in the living room. And all of these companies will be vital contributors, and as a company that partners with all of them, we’ll use all of their contributions and components to focus on the entire experience.

But our vision today is different. We think your system is bigger than your living room, bigger than moving your PC. We are not just talking about moving intelligence to your living room. We are focused today on creating a new class of system that will allow people to do new things with any content from anywhere. The tape we just watched is a great example of that.

I’d almost draw an analogy to the enterprise market. In the enterprise, the PC is part of the system, but it’s only a part. In the back office in businesses, there is a massive data center that oversees the storage, and the management, and the distribution of content and brings it to the PC, or to the printer and many other devices, and makes all of that work wirelessly and over a network. The way we see it, we are in essence, building the data center for the consumer, putting the consumer – you – in control, allowing you to put your personal signature on all of your entertainment, enabling you to access, and manage, and distribute, and edit, and store any content from anywhere at a price that's affordable, with an experience that's simple and enjoyable. We call it the HP Digital Entertainment System.

Last year, we were the first company to market with our Media Center PC, and that Media Center PC allows you to manage and enjoy all your personal digital content from one easy place. And it's now number one by a huge margin. Over the next 18 months, we’ll be rolling out the HP Digital Entertainment System.

For starters, HP will be bringing to market competitively priced entertainment displays, both a 30-inch LCD and 42-inch plasma screen. These digital displays can be used as great TVs. They offer a superior audio and visual experience, with a state-of-the-art imaging engine that displays true-to-life images and high definition resolution. But these are much more than TVs and these are much more than great viewing devices. These are digital displays that allow you to view any content from any source of any kind – which TVs don't allow you to do very well today – and they’ll begin shipping this fall.

HP is also announcing plans to drastically reduce the cost of digital projectors and integrate them into the Digital Entertainment System as a home theater component. The next generation of these projectors will come to market later this fall.

We will also be supporting Microsoft’s Media Center extender technology that was announced this week, with more robust devices that allow consumers to access digital entertainment residing on an HP Media Center PC from any room in the home, even if their Media Center PC is being used at the same time in another room of the house.

And as you also saw in the video, starting this fall, the first generation of the HP Entertainment Hub will be available for your living room. With it, you’ll be able to watch and pause live TV, and record your favorite TV shows from any source, including cable, satellite or HDTV. The Entertainment Hub will be your central storage for your entire digital entertainment collection, including music, and photos, and videos and movies. It will deliver the power to access all of your latest entertainment content, including new releases of music. It will be the central repository and distribution engine for digital content throughout the entire home. It will be sleek, and stylish, and work great with existing products and devices, but work better with HP technologies. It will allow you to enjoy more in the living room by bringing rich digital experiences to life. And, it will connect you to online services.

And finally, we're taking one of our most popular products, the industry-leading iPAQ handheld device, and building even more intelligence into it. I'm proud to announce that starting today, in addition to being a complete organizer, the iPAQ is going to become an intelligent remote control that you can easily use to control all your entertainment devices. And you'll be able to use it to access all your digital content, including music, photos, and videos either locally, or remotely, or streaming. And more importantly, you'll be able to throw half a dozen remotes in your living room into the trash.

So, what exactly are you going to be managing with all this great system? We all know that the best system in the world won't mean much if the content you're receiving isn't rich, and exciting, and meaningful to you. From creation, to distribution, to consumption – we are working today to ensure that the music and the movies that will be part of your digital entertainment system are as rich and compelling as they can be.

Let's start with music. One of the ways to ensure that the digital entertainment landscape really takes off is to protect the artists and the creators of the content. And so today, we are very proud to appear on this stage and take a tough stand on digital piracy.

You've heard of Moore's Law. Digital piracy has brought us Kazaa's law. Kazaa's law states that our sense of right and wrong doesn't evolve as fast as our technology. Just because we can do something, doesn't mean it's the right thing to do. Just because we can steal music, doesn't mean we should. Just because we can take someone's intellectual property for free, doesn't mean we should. Just because you can do it and not get caught, doesn't mean it's right. It's illegal, it's wrong, and there are things we can do as a technology company to help. And here is what HP intends to do.

Today, HP is stepping up its commitment to building, acquiring or licensing the best content protection technologies for our devices that will set secure copyrights without sacrificing great consumer experiences. In recent years, we’ve cancelled planned products because we weren't comfortable with the level of protection. We've been active through the Business Software Alliance to educate consumers and businesses that digital piracy is a threat to economic growth. We've worked in cross-industry efforts like the Secure Digital Music Initiative to develop a solution to digital piracy. And in partnership with Microsoft, our Media Center PC responds to a copy control flag embedded in current generation TV signals.

Starting this year, HP will strive to build every one of our consumer devices to respect digital rights. In fact, we are already implementing this commitment in products such as our DVD Movie Writer, which protects digital rights today. If a consumer for example, tries to copy protected VHS tapes, the DVD Movie Writer has HP-developed technology that won't copy it – instead, it displays a message that states, "The source content is copyrighted material. Copying is not permitted." And soon, that same kind of technology will be in every one of our products. HP will also work constructively with technology and content industries to implement Broadcast Flag into some of our products this year.

Later this year, we’ll also introduce a new protection technology that encrypts recorded content. Going forward, we will actively promote the interoperability of content protection technologies to ensure that content protection becomes the enabler it was intended to be – not the obstacle to compelling content that many fear. And we will also step up our efforts to work with anti-piracy industry advocates and consumer advocates.

And we are proud as well, to stand on this stage today with a man who has been a leader on intellectual property since the very first day the phrase "MP3" was uttered in public; a man who was one of the first music industry executives to sign on with a paid service; a man who has helped guide the careers of artists as diverse as John Lennon, U2, Dr. Dre, Sheryl Crow, and Eminem. As the parent of four children, he initiated with his wife Vicki, a very special Christmas album benefiting Special Olympics. And that’s gone on to be the most successful series of benefit albums ever launched, and has raised more than $75 million. He also was the co-executive producer of 2001’s September 11 benefit album, “America: a Tribute to Heroes.” Most recently, he was the co-executive producer of the groundbreaking movie “8 Mile.” It is my great pleasure to introduce the man the Los Angeles Times has called ”the visionary chairman of the Interscope Geffen A&M Records Group" – the number one label in the world, who is here with a few of his artists. Ladies and gentlemen, please join me in giving a warm welcome to Jimmy Iovine…

Jimmy: Thank you very much. Hi, this is not something a record executive does every day.

Rip it; burn it. For the last few years, parents and children have been given a pass to take something that they knew in their hearts was wrong: stealing. By taking sites like Kazaa – downloading, file sharing, taking those songs, making multiple copies of them, giving them to their friends, and in many instances, selling them. That's wrong, and the technology companies gave them the equipment to do it, and to do it efficiently.

And because of that, it’s been destroying the music industry, by more than a quarter reduction in record sales in the last three years. It's condoning the destruction of intellectual property – treasures – treasures of this country so important that they were guaranteed by the First Amendment to the Constitution.

Piracy: Who is it hurting? It's hurting kids, because kids are learning a disrespect for the basic relationship between creativity and ownership – and that's wrong. Parents – because they're in on the sham; fans, record stores. Do you know that in Westwood, California, you can't find a record store within walking distance of UCLA? That's not a coincidence. And there have been 5,000 record stores that have closed around the country this year alone. And at the top, the people who create the soundtrack of our lives, the artists.

I can't tell you how many people have told me: "This can't be illegal.” I walk into Best Buy, I walk down the aisles, and what do I see? A CD tower burner that burns 10 CDs at a time. Why else would they make those things? I don't know, but because of the courage of Hewlett-Packard and Carly, we're coming here to try to clear up a little of that today and for the future – straighten that out.

Let me tell you about a conversation I recently had with an artist of ours, 50 Cent. I told him about a woman that I met in New York that I used to know a long time ago, and she was telling me how great Kazaa is, the file sharing service, and that her son – who she pays $30,000 a year for tuition in Boston University – doesn't need any more money from her except for the tuition because he downloads music and sells it to his classmates, and he's making more than $500 a week. They pay for room. He pays for board. He pays for his gas for his car. Well, guess what 50 said to me? He said, "Let me know who this kid is and what school that is because I'm going to take his lunch. I'm going to take his car. My daddy died when I was two. My mother was killed when I was eight, and I didn't have 50 cents, let alone $500."

What you constantly hear from people who steal music is, "Oh, we're stealing from these rich artists." I think in this case, it was reversed. I think it was abundantly clear.

Speaking of kids, have you ever seen Kazaa? Has anyone ever been on Kazaa? Have you ever typed in Britney Spears, Pokemon, the Olsen sisters—the Olsen twins? Guess what comes up? You have a 50/50 chance of getting hard core pornography.

So why aren't politicians jumping up and down at this? Where are the family values now? They're ignoring the complex issues, and looking for a simple sound bite that can be uplifted, unfiltered and mainstreamed to networks in a matter of minutes.

Do you know how gratifying it was to someone like me and to artists that I represent to have Carly invite us to something as important as this? Someone who was willing to grapple with the complex issues and actually see the value in making an alliance with us?

There is an entire audience out there that is coveted by every company. All we ever hear is, “Where are the 12 to 25 year olds going? They're not watching television any more. They're hiding.”

Well, what Carly knows and understands is that our artists and our record companies communicate with that audience on a very intimate basis every day. We know what the influence of these artists is. They affect the way people walk, the way they talk, what they wear, and what they buy. For example, the artist 50 Cent and Jay Z's new sneakers are the fastest selling sneakers in the history of Reebok. They're outpacing the initial release of the original Air Nike Jordan. And they're not even basketball players.

We were lucky enough to be approached by Carly Fiorina and Hewlett Packard – the largest consumer technology company in the world, who said, "We're really interested in music and this piracy issue."

HP has a passion for music, for the artists that we care about. They respect the integrity of the copyright of intellectual property, and they are willing to take a stand and do something about it.


Since music is a killer app on the Internet, and it's being stolen, then the flip side of that has to be that we can really communicate through music to a very big audience and do it with profitability.

I'm making a commitment today on behalf of the Universal Music Group, which is 30% of music worldwide, that we're going to support HP to the point where they're going to beg us to stop. For a company that is willing – thank you – and I believe our industry will follow.

For a company that is willing to be this brave and forward-thinking, we as an industry are determined to show what working with us can do. Pepsi knew that. Pepsi is giving away 100 million free songs on iTunes next year. They're starting at the Super Bowl, and what happened was, Katie Lacie and Dave Berwick from Pepsi, said to me, "How do we own music next summer?" I said, "I'll tell you how to own music next summer. There's going to be a lot of difficulty and a lot of confrontation in the home. Help solve their problem."

What do I mean by that? We're suing down-loaders. You all probably know about that by now – I hope so, and we have to. So what's going to happen in our homes is, parents are going to say, "Hey, Johnny, get off that Kazaa thing. There's pornography on there. It's stealing, and I can't afford the lawsuit." Well, Johnny's going to say, "Well, then, Mom, buy Pepsi. They're giving away free music." It's great, right? Pepsi wins. Apple wins. Record companies win. Artists win, and Johnny's not thirsty. Right? So that's a good thing.

But while we can't take any credit for the success of the iPod or iTunes, I think Steve Jobs would agree with me that we threw our body at it. We love that company in this industry. We respect it, and every artist in the industry wants to support it.

And why that is is that one of the reasons we went, when we first saw iTunes, we said to him that what you need is unique content. You need something original everyday, something to show off that no one else has to separate you from all the other download systems that start. Well, iTunes is 70% of the legal download market now. Is it a coincidence? I don't think so, and I don't think you think so either. And we will do the same thing for HP and more. I challenge anyone in our industry to not come to this party and do the same.

This may sound personal, and the reason why it sounds personal is because it is personal. I started out in the record business when I was 19 years old. I started cleaning the toilets. Then I made tea, and I made tea so good for John Lennon that he gave me a job as an assistant in the studio, because he was English, and still is English.

And I didn't come here alone. Joining me today are some of the most important and influential artists in the history of our business, and I know I'm going to torture them right now. What I'm going to do is ask them to come up here and help me stop talking. So, Ladies and Gentlemen, from U2, all the way from Dublin, Ireland, the most influential guitar player in the world today, greet the Edge. Come on up here Edge… [The Edge joins Tommy]

The next person I'm going to invite up is someone very dear to my heart. She's the most important American female rock singer in the world today. She was in Austin, Texas, working today. I called her about this. She knows what issues are important in this country and in our industry, and she cares, and you all know she cares more than anyone else, or as much as anyone else. Ladies and gentlemen, my friend Sheryl Crow… [Sheryl Crow joins Tommy]

The next person I'm going to introduce has been with our label for a very short time. We're very lucky. Something happened corporately, and this artist fell in my lap. I called the president of his company, James Stroud, and I said, "James, Hewlett Packard and Carly are going to come out and take a stand against piracy," and he said, "Well, we're going to be there." So he brought with him, ladies and gentlemen, the biggest country artist in the world today, Toby Keith, and the president of his label, James Stroud… [Toby Keith and James Stroud join Tommy]

Someone else came with me today; he's on a different side of the business. He's the manager of Eminem. He's one of the most cutting-edge executives that we've found in the business today. He's also a partner in Shady Records, Shady Clothing, and anything you can call Shady, my friend, and I consider myself his mentor, Paul Rosenberg… [Paul Rosenberg joins Tommy]

Okay. I saved this guy for last because everyone who knows me knows how much this cat moves me and how close to my heart he is. This man has changed the course of music three times – so far. He's the most influential and successful record producer in the history of music, straight out of Compton, straight from an all-night session with Eminem, ladies and gentlemen, big up for Dr. Dre… [Dr. Dre joins Tommy]

We'd like to thank everybody, because we don't get to do this very often, and we'd also like to invite Carly out here for this incredible photo op!

Carly: Wow, what an honor to have this much unbelievable talent—come on, guys. Don’t be shy. You wouldn’t think these guys were shy of the spotlight. It is a great, great honor to share the stage with so much unbelievable talent, and to take a stand for what’s right. So Jimmy, thank you for bringing together an unbelievable collection, and you just keep supporting us till we shout stop, but I doubt we’re going to do that any time soon. Let’s hear it for this group!

Like I say, you don’t get that group on the stage together very often, and I deeply, deeply appreciate every one of them being here, but this is an incredibly important issue and so once again, let’s thanks them all for being here. They came here on their own time.

Now there is no question obviously that music is a very key part of the digital entertainment experience. And so a year ago, we sat down and asked the question: what is the best way for HP to bring music to our customers? And we’re a technology company, and so innovation is in our DNA; innovation is our lifeblood. We spend $4 billion a year on R&D, and it has helped make us one of the top ten innovators in the world. And today, we generate patents at a rate of 11 every day. And that rate of innovation has helped us launch, for example, 158 new products in a single day.

But as much as we spend on innovation, we also deeply admire the innovation of others. And so our innovation strategy is to focus our efforts where we can make a unique contribution and lead, and partner for the rest. So we thought about music, we thought about creating our own devices, we thought about creating our own music service. But when we looked at all the devices and all the services on the market today, we saw one company whose innovation we really admired, who had both the best music device and the best music service by far. I think you would all agree that Apple Computer has done a great service for music lovers with both the iPod and iTunes, and certainly the industry agrees.

Since it was first introduced in 2001, Apple has sold more than two million iPods, and iTunes as Jimmy mentioned, accounts for 70 percent of all the legal downloads out there. That's an awful lot of music in people's pockets.

And so, we‘re very pleased to be able to announce today that HP and Apple have signed a first-of-its-kind agreement. Starting in June, HP-branded digital music players based on the iPod design will begin shipping to a store near you, and HP devices will begin shipping with iTunes. HP is going to bring this award-winning product and service to the market on a massive scale, and I’m going to show you the first and only one, actually. This is the HP Digital Music Player. [Carly holds up an HP-branded digital music player]

As a company that reaches 110,000 retail outlets in all those countries around the world, HP has the scope, and scale, and supply chain to mass market this to a wider audience than it has ever seen before, and sell it at a good price. And we think that's a pretty good deal for everyone: for HP, for Apple, but especially consumers.

Why did Apple come to HP? Because we're an innovator; because we're applying R&D, and focusing our innovation to make the iPod and iTunes fit into our whole digital entertainment experience; because we have the engineering prowess to make complex things simple; because they know partnering is in our DNA and because we are a company that can make markets, because we are everywhere.

Now, one of the unique new iTunes services that Steve Jobs announced this week at MacWorld, was the ability to download songs from the Billboard 100. It just so happens that the number one artist on that list for the past month has been the immensely talented and beautiful Alicia Keys, with her brilliant second album, entitled, "The Diary of Alicia Keys." Now, I was going to download her, but I decided to invite her instead. Ladies and gentlemen, Alicia Keys…

Alicia Keys: Well, I made it. I want to thank you guys for having me. [Alicia performs]

Alicia Keys: Thank you. So, a lot of people ask me about this issue, and they ask me what I think about it, how does it affect me, and that kind of thing. And I feel that a lot of young kids – a lot of look them at it like it’s just a lot of fun, you know? Sharing, and kind of communicating and that kind of thing, and I always tell them – see, this is when I shock them; it’s going to shock you, too. I tell them, ‘You can download – but – if you like what you hear, go out and buy it, you know what I mean? Go out and support the artists.’ So in a way, that makes them feel what I’m talking about, and they definitely do that, so it’s something important to talk about, and I’m happy to be here to help support it and support you. And since I’m here, I figured that we’d do one more special song, is that cool? Thank you, and thank you for having me. [Alicia performs]

Carly: Thank you so much, Alicia.

Now, one of the places you are able to hear music from your favorite performers today is at Starbucks. As you may all know, over the past year, HP, as Starbucks' technology partner, has worked on new ways to innovate by helping turn more than 2,300 Starbucks locations around the country into Wi-Fi hotspots. HP enables unique and rich digital content at Starbucks. Customers are able to listen to exclusive interviews, for example with Sheryl Crow, and also are able to watch live performance footage of well-known blues artists and listen to sample tracks. And, we look very much forward to working with Starbucks to continue these innovations in the near future – in the very near future.

Digital music is a big part of the digital revolution, and you've heard what we're doing here. Digital photography is a big part of the digital entertainment experience, and our leadership in this space is well known. But what's not as well known is what we're doing with the movie industry. Some of the best content in the world today is being created by some of our biggest and best-known studios, and HP is very proud to be part of that process. A few years ago, DreamWorks called upon HP technology to help bring the adventures of a certain green ogre to life in one of the most advanced animation films ever created.

Today, DreamWorks has nearly a thousand high-end HP graphic workstations running Linux for its most talented and demanding creative artists. If you visit their technical nerve center which is deep beneath their Glendale studio, you'll see an HP system, that when linked with their other render farms in Redwood City, California and in Bristol, England, would rank among the top ten supercomputer sites in the world.

Our relationship with DreamWorks provides unique collaboration opportunities as well as opportunities to help define future consumer entertainment technologies. So for example, working together, we’re tackling some of the toughest storage challenges in the world; we’re working to improve the fidelity and security of digital distribution, making big strides in information compression, and pioneering new digital imaging technology.

But it was with that certain green ogre that we've had the most fun. And in fact, DreamWorks had so much fun doing it that they came back to do it all over again, and are working with us to create Shrek 2, due in theaters on May 21, so let's take a look. [Shrek 2 trailer plays.]

Of course, it's not just studios that originate movies; TV networks do, too. And at HP, we also realize that one of the great drivers of the digital revolution is people who want to relive favorite movies or television shows they saw 20, or 30, or 40 years ago in CD quality picture and sound. And the problem is, some of the very best content available is still sitting in old vaults for nobody to enjoy it, and it actually shouldn't be that way. We're helping to bring them back out into the light of day, and in doing so, to create new revenue streams for their creators.

So for instance, HP is partnering with CBS to help fans experience the magic of shows like the Beatles on Ed Sullivan – in digital quality picture and sound.

HP is also working with Getty Images; they’re the world's leading provider of imagery, film and digital services, to expand and power its digital image archive and respond faster to customer needs. That’s actually not a small challenge for a Web site that welcomes 150 million unique visitors each month.

Now movies aren't just about studios; they're also about independent voices. Technology today is helping to democratize creativity. To encourage the creative spirit, the collaboration, and the willingness to take risks, HP is working with the Sundance Institute to provide the backbone technology for the Sundance Film Festival. We're also involved in powering the Sundance Online Film Festival, which is a creative discovery, distribution, and delivery portal – all in one – hosted entirely on an HP platform. And so now you can experience the spirit of Sundance right from your very own mobile device or PC; you can watch over 40 short-subject films, vote for your favorite movies, and watch a bio of an emerging filmmaker. During this month, HP and Starbucks are teaming up to bring you the Sundance Online Film Festival free of charge at any of the wirelessly-enabled Starbucks in North America. And, you can also view it here at our booth at CES, or go to sundance.org.

The democratization of technology in film today is also helping to discover new voices. There used to be a time when you couldn't even think of shooting a film for less than $100,000. By shooting on digital video cameras, today's filmmakers can escape all sorts of costs, like film stock and expensive lighting. By editing on their home computers, they save hundreds of thousands of dollars in post-production costs. By distributing film through the Internet, they can avoid expensive marketing campaigns.

Through innovative products like our DVD movie writer, that lets you easily edit, and add, or transfer home video directly from tape to digital, while also exploring ways to easily blend audio and video and photos together, we’re working to put the power of director into your hands. We’re also proud to be working through a unique collaboration with two artists who are using the tools of the digital age to empower the next generation of filmmakers. So, ladies and gentlemen, the executive producers of Project Greenlight: Chris Moore and Ben Affleck. [Chris Moore and Ben Affleck]

Chris: Well, thank you Carly for having us, and I’m going to go a little off script for a second – which scares everyone – but I just want to say that the movie business usually follows the music business in distribution and other stuff, and we feel as fired up about piracy and the other stuff as anybody else, and I think it’s great that Hewlett-Packard has stepped forward and decided to get behind it because it’s going to mean they’re not stealing our DVD’s in years from now, so, thank you to Carly and HP.

We’re also really excited because they’re getting involved with Project Greenlight, so we’re really glad that that gets to keep going with a company like HP. You know, a few years ago, Matt Damon, who couldn’t be here, and Ben and I didn’t actually know anybody and had no contacts, and then a little movie like – well, we knew each other, which turns out pretty good right now…

Ben: That was the rough shape of my career at that time in that he was my best contact…

Chris: But, we got together with our company and the people at Miramax after “Good Will Hunting” came out, and felt like there are probably a lot of other people out there who don’t know anybody, and are having trouble moving forward. And we launched Project Greenlight with the goal of giving undiscovered filmmakers a chance to break into Hollywood.

This project grew out of our real belief that there are a lot of people out there who we think are as talented as us – well, maybe not as Ben – but as me…

Ben: I don’t have to take this…

Chris: …Who have a real vision to make films and get out there and get people to see their films. We think the next Steven Spielberg, the next Kevin Smith might be out there right now shooting a digital movie on a camera, and that they’re using laptops to edit them; they’re sharing them with each other over the Internet, and we really want our Project Greenlight to be a way to bring that forward and to bring that to people out there to learn and have a chance to bring their visions to the future. Thank you.

Ben: This is going to be a study in contrast –somebody who goes off the script, and somebody who’s trained to stay on it…

For those of you who are less familiar with Project Greenlight, let me explain what it is. The Project Greenlight contest harnesses the power of the Internet to enable thousands of amateur screenwriters and directors to submit their material from anywhere in the United States. This community then also gets to help choose the winners of the contest through an extensive online peer review and voting process.

The winning writer-director team then gets a budget of at least one million dollars from Miramax to make a real feature film. We pull back the curtain on the entire filmmaking process as we follow this experience from script to screen in a documentary television series. In our first year, a Chicago insurance agent names Pete Jones emerged from the field of 7,000 entrants with his film, “Stolen Summer,” which premiered at the Sundance Film Festival.

Last year, Ohio State University grad student, Erica Beeney won the screenwriting contest with “The Battle of Shaker Heights.” Erica then paired with our first ever director contest winners, Kyle Rankin and Efram Potelle.

The third Project Greenlight contest is about to begin, and it’s going to be – we hope – bigger, well it’ll certainly be bigger; we hope it’ll be better, so get your screenplays or your director videos ready because we will start accepting submissions on or around February 4. Go to ProjectGreenlight.com for the official rules and details if you’re interested…and I know there’s a few people out here with scripts, come on now. There’s six guys back stage handing me scripts.

Once again, we will have a screenwriting contest and a directing contest. This year, we will be accepting all types of scripts, but we’ll be looking specifically for genre projects – projects that have a powerful impact, like maybe a horror, or thriller, or action, or comedy projects that really grab the audience’s imagination and attention, and hopefully, make some money.

We’re also very excited about the show that will be airing, this time on the Bravo network, which we’re extremely pleased about. It airs in over 70 million homes. Bravo has been a big supporter of Project Greenlight and will help us bring it to a huge base of viewers.

The relationship that really made this happen is with HP, and it allows us to reach many, many more people who want to unlock their creative interests beyond the process of filmmaking. In the next few weeks, we’re going to be announcing an additional element of Project Greenlight: the ability for just about anyone around the world to participate, using easy-to-use consumer technology from HP, so stay tuned for that.

Finally, as you can see by our being here, we are extremely excited that HP is the presenting sponsor of this year’s contest, and I’ll go off script myself for second. It really was critical that we get somebody, not just a sponsor, not just somebody who had money, but somebody who represented the same ideas that we cared about, and who was really interested in – as Carly it put so well – the ‘democratization of technology’ and the ways in which it makes peoples' creative outlets more accessible and frankly you know, there’s a barrier to entry in terms of the cost much lower. So it was really a perfect fit, and it makes perfect sense because HP is all about enabling creativity through technology, whether it be writing screenplays, or editing films on PCs, or just shooting and printing photographs at home.

So, we want to thank you Carly, we really do – not just because it says that, all right – we actually are very grateful. We do appreciate it, and we want to thank HP for enabling us to keep doing Project Greenlight and to continue helping young people, young talent to invent. So, thank you very much.

Carly: Thank you, guys.

From the very beginning, the ultimate promise of the digital revolution has always been about putting more power in the hands of people – to allow all of us to do more, be more, and enjoy more in our daily lives. As I said in my very first speech as HP CEO right here in Las Vegas, the digital revolution is not about cyberspace – cold, alien, distant – it's about technology that is intimate and intuitive; technology that is there for us where we want it to work, when we want it to work, and how we want it to work.

That future is now.

We really are entering an era in which everything – everything – is going to be digital, mobile and virtual; where all of us – every single consumer – we’re the photographers, and the film producers, and the deejays.

We are all digital revolutionaries now.

But if we are going to fulfill the promise of the digital revolution, we need to think holistically. The reason that companies like HP are defining this market in new ways is because the future will not be made simply by the companies who put the coolest devices in people's hands, or create the prettiest devices to hang on people's walls. They will be made by those companies who understand how to move content from creation, to distribution, to consumption; who understand what's required to hide complexity and deliver a great end-to-end consumer experience, and companies who have the kind of partners to create and support the experiences you want.

I really do believe that we are on the verge today of a digital entertainment future where every single one of us has access to every song ever written, every movie ever filmed, every photograph you've ever shot – available any time you want it, anywhere you want it, on any device that's most convenient.

When you really think about it, revolutions have always been about giving power to the people; they've always been about people taking control; they've always been about the power of democracy. And the digital revolution is about the democratization of technology, and the experiences it makes possible – experiences that change lives and change the world.

Not everything is going to be easy. Not everything is going to happen precisely the way we plan or predict it to happen, and not everything is going to happen overnight. But this should not deter us from the vast promise of the digital age.

We don't know for sure where the next five years will take us. But one thing we do know for sure: revolutions aren't made by doubters, or cynics, or skeptics. Revolutions will always be made by those people who believe everything is possible.

Thank you.

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