Microsoft Plays A New Tune

Microsoft’s “all in one solution” for consumers who want to access their music wherever they are on whatever device they’re using has begun an extended rollout that starts streaming on Xbox 360 Tuesday, launches in earnest with the debut of Windows 8 on Oct. 26 and will, over the course of the next year, move from devices running its own PC, tablet and mobile operating systems to those using iOS and Android.

The Xbox Music service “combines the best aspects of free-streaming radio, music subscription services and music purchasing options, all in one elegant package,” according to Yusuf Mehdi, corporate vp of Microsoft’s Interactive Entertainment Business Marketing and Strategy, in an announcement posted on Microsoft’s website yesterday. “No longer do people have to rely on ‘service hopping’ to get the music they love.”



What does that mean to the consumer? Well, Mehdi offers the following “not-so-outlandish scenario”: Suppose you’re listening to Pandora at work and bookmark a song you like. “Later, in the car, you open Pandora to look up the name of the bookmarked song, then you open Spotify so you can use your subscription to listen to it again. Two weeks later, you’re thoroughly in love with the song, and decide you want to buy it so you can burn it to a mix CD you’re making a friend, so you purchase the MP3 on Amazon or iTunes.” 

Sounds like a lot of work, right? Now you can do it all through Microsoft, Mehdi says, which will have a library of about 30 million songs floating in the cloud that can be accessed on any device through an Xbox Music Pass, which costs $9.99 a month. Xbox Music itself -- the default music player for Windows 8 -- features free, ad-supported streaming of the entire catalog on PCs and tablets over the Internet. 

“The key proposition with Xbox Music is its pervasive design, points outThe Guardian’s Keith Stuart. That and the fact that it has “baked” the service into Windows 8, as CNET’s Greg Sandoval reports, an arrangement [that] could awaken antitrust concerns, says Nick Wingfield in the New York Times. Windows 7 and Windows Phone 7 users will not be able to use the new service, according to The Verge’s Tom Warren. Zune support will continue for them.

Indeed, this is not Microsoft’s first highly self-touted foray against Apple’s iTunes, the big-time operator in the music business scene (with apologies to Van Morrison), as Wingfield quickly reminds us. 

“Music fans have often viewed Microsoft as something like a bad cover band, one that pumped out uninviting facsimiles of Apple’s iPod and iTunes with its Zune music players and service,” he writes. “Now that the Zune brand is dead, Microsoft is once again in search of a hit in digital music. But this time, to improve its odds of success, it is marshaling some of its most powerful brands as never before: Windows and the Xbox.”

Citing NPD Group data, USA Today’s Mike Snider reports that “Despite Microsoft's attempts with its Zune devices and music player and, before that, MSN Music, Apple remains dominant in digital music sales. In the second quarter of 2012, Apple accounted for 64% of digital music sales…. Apple also sells nearly one-third (29%) of all music, digital or physical. While Amazon commands 16% of the digital market, Microsoft and others, including Google Play, had market shares of 5% or lower.” 

Wingfield writes that Microsoft’s “do-over… is a sign of how a strong music service has come to be seen as a prerequisite for any serious player in the gadget business.” And while “the PC market does not generate the excitement it once did, people still buy hundreds of millions of computers every year, the vast majority of which run Windows.”

Count Matthew Miller, “The Mobile Gadgeteer” blogger on ZD Net as a true believer. “In addition to the Xbox Music streaming and offline options, early in 2013 Microsoft plans to offer a scan-and-match feature and social aspects of the service.” he reports. “So it looks like Xbox Music will truly be the one I have been looking for with streaming music, offline music, radio functionality through Smart DJ, cloud storage and match, and a music store for individual tracks.”

Gartner analyst Michael Gartenberg likes what he’s hearing about Xbox Music from a business perspective. “This gives Microsoft a strong music story which they’ve lacked for years and extends the Xbox brand to media and entertainment,” he tellsBloomberg Businessweek’s Dina Bass. “A free streaming service with ads every 15 or 20 minutes is pretty compelling.”

Memo to brand marketers: It’s not all that often that you see the phrase “ads every 15 or 20 minutes” and “compelling” in the same sentence, is it?

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