• by Emily Burg , November 7, 2006

"Welcome to the social" is the tagline on store posters spotted for Zune, Microsoft's personal digital music player, which arrives in stores Nov. 14.

That concept plays on Zune's sharing functionality, which allows users to transfer songs to each other over a WiFi network. While not quite a category-killer application, it is a feature that distinguishes Zune from the ubiquitous Apple iPod.

Another notable feature: Microsoft appears nowhere near the Zune brand name.

"It's very curious that Microsoft is distancing Zune from Microsoft and Windows at a time when the company is spending hundreds of millions to launch Vista, which has music as a huge part of the experience," said Michael Gartenberg, analyst with JupiterResearch. Vista is the operating system Microsoft is scheduled to unveil in January.

One reason for that strategy may be the disconnect between Microsoft's reputation as a corporate monolith and the 18-24 hipster demographic that Zune hopes to attract with its peer-to-peer wireless music sharing capability, and pre-loaded library of independent music content.

Stocking digital independent music content rather than songs by mainstream artists is another way that Zune is trying to differentiate itself from the iPod, which has struck high-profile marketing deals with legends such as Bob Dylan. Initially, it may give them some traction among a younger, more cutting-edge audience, but Microsoft may soon find that it needs to make deals with the hit makers, too.

"The content shipped on the devices as sample content is stuff most consumers haven't heard of. The problem with long-tail content is that it can work, but it needs the hits, too," said Jupiter's Gartenberg.

"Hardcore indie music fans are not in Microsoft's usual circle, but at the end of the day everyone knows Zune is a Microsoft brand, so it's hard to see what Microsoft's game is at this point," Gartenberg said.

A Microsoft spokesperson said that Zune's marketing strategy isn't about identity politics, but rather a corporate strategy to give each new product its own platform from which to launch.

"Zune is a new brand for Microsoft. The company is not trying to distance itself, per se," the spokesperson said. "Each new product has its own brand personality."

Gartenberg agreed that with Zune, Microsoft is taking a page from the Xbox marketing strategy playbook, although that's not necessarily a wise idea. "Gaming and music are very different categories," he said.

At least Xbox has its own silo on the Microsoft.com Web site. Perfunctory tech specs and press information can be found there, but no semblance of Zune's brand identity. That resides at Zune.net, where visitors are greeted with the "Welcome to the social" message. Zune.net also hosts Zune Marketplace, where users can buy songs using Microsoft Points instead of dollars. Each song will cost 79 points (or 99 cents). The 30GB Zune will retail for $249, the same as the 30GB iPod.

Weak consumer anticipation accompanies the Zune release. While blogs buzz with talk about what Apple's next product might be, and backlogs for new iPods have been known to occur around peak retail times, there's been little clamor for Zune.

Microsoft is working with national electronics retailers on in-store marketing strategies, but the sheer dominance of the range of iPod products guarantees that iPod will have more retail real estate.

Best Buy will carry the Zune and display it in the digital music player display area, a Serpentine-like display in which each product is displayed it the same way--every device gets one spot.

"We'll carry its accessories in the accessory area, which looks Apple-dominated because that's just what most of the products are," said Brian Lucas, a spokesman for Best Buy.

RadioShack plans to sell Zune in 1,000 of its 6,000 national stores that have shown high demand for digital music players. Its spokesperson said they are waiting to receive in-store display materials from Microsoft to determine how Zune will be placed in its stores.

Microsoft is slowly beginning to roll out advertising for Zune. Universal McCann is handling media planning and buying, and 72 and Sunny handle strategy and creative on the account, which is estimated at $100 million and whose paid media components include cinema, network and cable TV, outdoor, online and radio.