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Here’s an odd duck – Microsoft last week launched a music download and streaming service beta in the United Kingdom called MSN Music:
As first revealed by The Telegraph, in July 2009, the download service will go live tomorrow in beta. However, the streaming side of the service will only be available to “several thousand” people invited to test the product.
MSN Music had been scheduled to go live by the end of July. However, the product “took longer than they thought it would to get it to the high quality they wanted”, according to Peter Bale, executive producer of MSN.
Microsoft has signed deals with the four major music labels: EMI, Warner Music Group, Universal Music Group and Sony BMG, securing around one million tracks for the launch ready to download. Comparatively iTunes has over 10 million tracks available and 7digital has over eight million tracks in its catalogue. The Telegraph understands independent record labels have yet to be signed.
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The service will sit within the ‘Music’ section of MSN and be promoted across the portal. When asked why Microsoft was making a move into the highly competitive world of digital music services, Mr Bale replied: “This shouldn’t be seen as a major company-wide strategic move. We are replacing a service that used to be on MSN a year ago and the service is very much confined to MSN.
Easy for Mr. Bale to say. A more likely rationale is that MSN Music is a stopgap service until the Zune Marketplace finally gets beyond North America:
The download store will be run on the same technology Microsoft uses to power the Zune marketplace in the US. Zune is the company’s music player, which is only available in the US, and similar to Apple’s iTunes, it has its own music download online store. However, Mr Bale said the company’s decision to use the same technology for this service was a logical move and not “necessarily a pre-cursor to Zune launching in the UK”.
I guess they will have to leave the lights on waiting for the Zune to show up.
All of this is more or less understandable except for choosing the MSN Music name which conjures up unpleasant memories of the last MSN Music service which was killed by the Zune in 2006.
Microsoft plans to discontinue all older Zune personal media players when the Zune HD arrives on September 15:
I met with the Zune folks today and one bit of information than I can discuss immediately is that the Zune HD will be the only device type going forward: The current Zune models, the Zune 8, 16 80, and 120, have all been discontinued. So if you want a classic Zune device, buy it now, as they’ll only be around while supplies last. The Zune HD goes on sale September 15 in 16 GB and 32 GB variants.
Microsoft will continue to support the older Zune versions with software updates. Speaking of which, there will be a new version of the Zune software (Zune 4.0) released with the Zune HD on September 15. No details have been released but it is expected to support high definition video and a Zune applications store for the Zune HD at least. By all early accounts the Zune HD is a nice player, but the real question is whether nice will cut it when it goes up against Apple’s iPod juggernaut.
Microsoft today formally unveiled the Zune HD, their latest attempt to compete with the Apple iPod in the personal media player market:
Zune HD, the next generation of Microsoft Corp.’s portable digital media player, is available now for pre-order and is set to hit store shelves on Sept. 15. The player, available in 16GB and 32GB capacities, is the first touch-screen Zune and includes powerful playback technology to give you a different way to experience media on the go.
The online brochure is at http://www.zune.net/zunehd and you can preorder at Amazon, BestBuy, Walmart, or the Microsoft Store with the 16GB version retailing for US$220 and the 32GB version going for US$290. Full retail availability is scheduled for September 15.
So what’s new about the Zune HD?
- Built-in HD Radio™ receiver. Allows you to listen to higher-quality sound than is available from traditional radio channels, as well as access additional programming through HD2 and HD3 multicast channels from many of your favorite local FM radio stations at no extra cost.
- HD video output capabilities. Supports HD video playback from the device through a premium HDMI A/V docking station (sold separately) directly to an HDTV in 720p, making it easy to enjoy better-than-DVD-quality video on your own big screen at home.
- OLED touch screen. Allows you to easily flip through music, movies and other content. The 3.3-inch glass screen and 16:9 widescreen format display (480×272 resolution) offer a premium viewing experience.
- Built-in Wi-Fi. Allows for browsing, streaming or downloading new music from Zune Marketplace.
- Internet browser. Full-screen Web browsing, optimized for the multitouch screen with zoom-in and zoom-out gestures.
- Accessories, at home and on the road. Zune HD and AV Dock charges and syncs players while playing supported 720p HD videos on HDTVs. Play HD Radio, music and podcasts from your Zune HD device through your car stereo using the Zune Premium Car Pack.
The target is clearly Apple’s iPod Touch which is roughly comparable but about US$100 more expensive and lacks the radio. However, the Zune HD lacks the equivalent of Apple’s very popular App Store, at least so far. Still there may be room for Microsoft to gain some share at the high end of the personal media player market although there are many skeptics.
When I first saw the announcement that Microsoft had hired Wal-Mart veteran David Porter to open a chain of Microsoft retail stores, I was fairly perplexed because Microsoft hardly needs better retail distribution and so many of their cash cow products are sold via partners (e.g. HP, Dell) that have their own separate retail relationships. It could, of course, have been simple Apple envy, but that would be a very silly way to run a business since Apple’s stores were born out of a precipitous decline in Apple computer retail availability and profited from Apple’s proprietary offerings of combined software and hardware which Microsoft only matches in a few areas like the Zune.
I shouldn’t have worried, since Microsoft Entertainment and Devices Division head Robbie Bach apparently knows that lesson very well and reveals that the purpose of the Microsoft retail stores is not moving product:
“And I don’t think — I saw some of the commentary that this was designed to be the same as Apple or whatever. You should think about it, I think, quite differently.
“Apple’s approach was about distribution. People forget that when they entered their stores [in 2001], this was quite a while ago, they didn’t have distribution for Macintoshes, so they created their own distribution.
“We have plenty of distribution. These stores for us are about building our connection to customers, about building our brand presence and about reaching out and understanding what works and what improves the selling experience.
“So Apple you would think of as a volume distribution play. You should think of ours as much more of a brand and customer relationship investment more than anything else.”
I guess we won’t have to worry about tracking “same store sales” for the Microsoft retail stores since they are only for public relations value and that is largely intangible. Still, I wonder if this is really the best investment of Microsoft marketing dollars and perhaps a more subtle form of Apple envy.
