In my previous article about Microsoft’s latest attempt to catch up to the iPod, no pricing, ship date or official dimensions were available. Since then, more concrete details have become available. First off, Microsoft has finalized the price for their 30GB POS device: $249.99 US. That’s just 99¢ more than the equivalent capacity iPod. The device will go on sale on November 14.
Zune Marketplace will sell music for 79 Microsoft points per track, which works out to 98.75¢, since 80 Microsoft points will cost you a buck. So for all intents and purposes, songs are the same price as they are on Apple’s iTunes Store (99¢). There will also be an all you can eat subscription service for $14.99/month. This is more expensive than some of the PlaysForSure subscription services available from other vendors. Microsoft Marketplace will launch with only music for sale. Video will come down the road.
The shipping Zune player is considerably bigger than I had estimated based on the publicity photos previously released. Of course, any time you have to estimate, you’re bound to be off a tad, not to mention publicity photos could be misleading. My guess was that the device would be between the size of an iPod 30GB and iPod 80GB. The reality is it’s bigger than even the 80GB iPod, so owners of that wonderful device can still brag they have 50GB more storage AND a smaller device. The actual dimensions are 4.4 inches x 2.4 inches x 0.58 inch with a weight of 5.6 ounces. That makes it 13% bigger/2% heavier than the iPod 80GB, and 45% bigger/30% heavier than iPod 30GB it’s trying to compete directly with.
So all that extra bulk must be for a bigger battery that will beat the iPod’s battery life, right? Wrong. According to Engadget:
They were pretty tight lipped about it, but our new pal and independent analyst for Directions on Microsoft, Matt Rosoff, let us know that according to his contacts, with wireless off we can expect a 12 hours of music playback at 128Kbps, 3.5 hours for video playback, and 4.5 hours when running a slide show. Compare that to the 30GB iPod’s 14/4 hours and the 80GB iPod’s 20/6 hours, and it’s a little difficult to fully envision the payoff for that added thickness and height.
So iPod 80GB owners can also brag they have nearly double the battery life of the Zune as well. We can only imagine what the battery must be like with WiFi turned on.
Does Microsoft really think people will buy a bigger, uglier device that has worse battery life JUST because it has a bigger screen and gimmicky WiFi that is next to useless? Anyone serious about video is going to prefer the higher capacity and longer battery life of the 80GB iPod, and the casual video user will really notice how much smaller/lighter the iPod 30GB model is. Microsoft is going to learn a hard lesson from the Zune this holiday shopping season. But hey, they have to spend that cash hoard on something, nothing says it has to be successful. One thing is obvious: the Zune isn’t even fit to compete against other products on the market from the likes of Creative and iRiver, against the iPod it’s DOA.
[Edit 10/3/2006, 11:18 am: Changed "for all intensive purposes" to "for all intents and purposes". Thanks to reader "Poppycock" for catching that error.]
October 2nd, 2006
Last Friday, The Register, one of my regular reads posted an article by frequent contributor Andrew Orlowski titled The iPod’s Achilles Heel? It’s er… Reader’s Digest. I took objection to so many of the points Mr. Orlowski made, that I set out to write a rebuttal here on Art Of Geek.
The article in question brings up quite a few points, most of which are wrong, misleading or inaccurate. It attempts to identify the one major weakness the iPod has (it’s Achilles heel, to use a mythological metaphor), and make a point about how the Microsoft Zune or eMusic (or maybe both) have a chance to gain traction in the market by taking advantage of this weakness. Orlowski sums this weakness up at the beginning of the article as such:
â€But someone at Microsoft thinks they’ve found what may be the Achilles heel of Apple’s end-to-end music delivery system, of which the iPod is simply the best known part.
And it’s all about how you acquire music.â€
Sounds good so far. I read on expecting to find some yet undiscovered digital music strategy, or maybe an in-depth explanation of how the Zune’s Wi-Fi music sharing feature would be more than a gimmick and help Microsoft take some major market share back from Apple. Instead, what Mr. Orlowski presents is old news regurgitated in a not so new way. I got the impression of Mr. Orlowski as someone who has joined the party extremely late and proceeded to tell stories or jokes that everyone has already heard. Unfortunately for him, he gets the stories wrong, and ruins the punch-lines of the jokes.
The inaccuracies start right from the beginning, where he is wrong on two points:
“The iTunes store has been vital to the iPod’s success, which in turn has been the engine behind Apple’s recent growth. iTunes dominates the legal download market in the same way the iPod dominates the MP3 player business. It’s hard to remember now that for the first year of its life the iPod was a flop. But once Apple introduced iTunes for Windows, the mass market perception of the device changed from one of expensive luxury to convenience item.â€
First off, the iTunes Store has NOT been vital to the iPod’s success, it’s the other way around, the iPod has been vital to the iTunes Store’s success. The vast majority of people do not buy an iPod so they can use the iTunes store. They buy one to listen to their own existing library of music, either ripped from CDs or acquired through file-sharing services. It’s only after one installs iTunes that they will begin to discover the iTunes store. It’s iTunes, the software, which has been vital to the iPod’s success, ensuring a streamlined consumer-friendly interface and simple, reliable syncing with the iPod. Orlowski even debunks this inaccuracy later in the same article with this statement:
“The average iPod owner has done little more than dabble with Apple’s store, figures show, carrying an average of 21 iTunes-purchased songs. Extrapolate those numbers to the wider market and you’d have figures suggesting the public has suddenly stopped acquiring music. That clearly isn’t true - they’re simply getting it from other channels: physical and illegal-digital.â€
So which is it Andrew? Is the iTunes Store vital to the iPod’s success or is it just something that the average iPod owner simply dabbles with? It clearly can’t be both.
Furthermore, describing the iPod as a flop in it’s first year is complete hogwash. Compared to where it is now, it might be construed as such, but considering the iPod was first launched as a Macintosh only device, it was a roaring success, which explains why Apple even considered releasing a version for Windows. In fact, Apple sold over 1 million iPods before releasing the Windows version in October, 2003, and nearly three-quarter million in it’s first year. Only in Orlowski’s world can selling that many of something to a market that was only around 2% of the whole be considered a flop.
The article continues with a description of what the author believes the key factor in the iPod’s success was: the convenience factor of not having to burn CDs. Describing Apple’s original Rip, Mix and Burn campaign and how with the iPod it became simply Rip and Mix. An accurate account in my opinion, but he fumbles badly with this lie:
“Of course the cost of this convenience is pretty high - and is still born by the punter eventually - but the consumer perception of ease and convenience had to be there for the iPod to be a success.â€
Of course the author is referring to the price of the iPod in his reference to the cost being pretty high. Andrew Orlowski either doesn’t get paid very well by The Register for his articles, or he’s been hiding under a rock for the last few years of the iPod’s success. The iPod shuffle launched in January 2005 for as little at $99 US, and the entry price dropped to $69 US in February 2006. The 2nd generation iPod shuffle, which ships next month costs just $79 US.
The dementia and misinformation continues:
“Today, if you can get music industry types to agree on anything - and don’t forget the jostling between indies and majors, between publishers and recording rights holders puts any flame war in the shade - it’s that the iTunes Store isn’t the future of music. And after more than three years, this is a consensus that’s based not on wishful thinking, but empirical evidence.
Principally this is because iTunes doesn’t make money for anyone except Apple. In itself, the iTunes Store barely breaks even - but it fuels the much more lucrative downstream bit of the delivery system. iTunes sales remain vanishingly small as a proportion of the music business, but most importantly of all, iTunes doesn’t generate money for anyone except Apple. Broadband providers, PC manufacturers, insurance companies, and the battery-replacement services have all profited in some way from the iPod’s success - but no one in the music value chain. Steve Jobs doesn’t even leave crumbs on the table.â€
Interesting. Orlowski is obviously ignoring the fact that Apple’s iTunes Store sells 88% of all legal online music and that it is the number 5 retailer of ALL music (including physical media sales) in the US, up from number 10 just 10 short months ago. Apple said they are on track to unseat the #4 position holder, Amazon.com, in 1H2007. Back when they were only the number ten reseller, they were expected to account for 3.5% of all music sales in the US. Now that they are the number 5 reseller, where does that put them?
But the big lie from that last quote is his assertion that iTunes doesn’t generate money for anyone except Apple. A statement that seems perplexing given that in the very same paragraph, Orlowski states that the iTunes Store barely breaks even. It’s already been public knowledge for a long time that of the 99¢ Apple charges for an individual track on the iTunes store, 65¢ goes to the music label, 25¢ is distribution costs, leaving 10¢ for Apple, which gets eaten up by credit card fees and their own R&D and infrastructure costs. Of the 65¢ the record label gets, the artist apparently gets 10¢, which leaves the label with 55¢. So it seams that contrary to the BS that Orlowski would have his readers believe, the artists make as much as Apple does, and the labels make about 5 times as much, while assuming none of the financial risks of the sales model, or any of the distribution costs.
Orlowski goes on to try to minimize the impact that the iTunes store has had by using misleading statistics, and throws in another lie to boot:
“The average iPod owner has done little more than dabble with Apple’s store, figures show, carrying an average of 21 iTunes-purchased songs. Extrapolate those numbers to the wider market and you’d have figures suggesting the public has suddenly stopped acquiring music. That clearly isn’t true - they’re simply getting it from other channels: physical and illegal-digital.
So in business terms, the iTunes Store is a deceptive chimera. Pakman has a joke he likes to illustrate it.
“The iTunes Music Store [ITMS] buyer buys 25 songs in the first year, 15 in the second year, and in the third year, the battery has died, so you have to go out and buy a new iPod,” he says.â€
In journalistic terms, Orlowski’s article is the deceptive chimera. Dividing the number of iTunes Store songs by the total number of iPods holds no value whatsoever. First off, what percentage of iPods ever sold are no longer in use? Second, what percentage of iPod users actually buy music from iTunes? The more accurate calculation would be to divide the number of iTunes Store sales with the number of customers who have actually purchased music from the service. That would provide a more accurate benchmark and indicator of how the average iTunes customer uses the service. As for the “joke” regarding having to replace the iPod’s battery after 2 years, this is baseless. Of the three iPods I have owned, my first being an original 1st generation iPod purchased in December 2001 whose battery is still going strong and is used regularly by my brother. My second, a 3rd generation 40GB model bought in spring 2003, is still going strong as well and is in regular use today, three and a half years later. Orlowski’s joke reference also completely misses the fact that the batteries in most iPods can be replaced, either by Apple, third party resellers or the end-user themselves. A fact he himself alluded to in the previous quote, but has conveniently forgotten just 3 paragraphs later in his article.
But this isn’t the first time Andrew Orlowski has spread this misinformation about the iPod’s battery and iTunes store sales. I found an article dated March 2, 2006 titled iTunes’ long march to market share in which he attributed the exact same joke about iTunes Store sales and the iPod’s battery to Aydin Caginalp, partner at the law firm Partner, Alston & Bird:
“There are 21 songs bought from iTunes Music Store on the average iPod.”
But surely, you’ll point out, momentum is growing?
And here’s the third statistic to remember, which comes courtesy of Aydin Caginalp. He’s a partner at the law firm Partner, Alston & Bird, and he specializes in entertainment law. Here is the reality behind the figure of 21 songs per iPod:
“The iTunes Music Store [ITMS] buyer buys 25 songs in the first year, 15 in the second year, and in the third year, the battery has died, so you have to go out and buy a new iPod.â€
It became apparent at that moment that Andrew Orlowski’s latest article is simply a regurgitation of his previous eMusic article into a new one about the Microsoft Zune.
The article goes on about music subscription services, and how “every company wants to be in subscriptions businessâ€, but ignores the fact that the majority of consumers don’t want anything to do with them. Napster’s ongoing financial difficulties is evidence of this. That doesn’t stop Orlowski from trumpeting the success of eMusic, a company that has taken the far distant number two online sales position, despite the fact that eMusic isn’t a true subscription music plan. A quick read of eMusic’s about page reveals that the subscription only allows you to sample the music. Customers have to pay extra if they want to own the music. With Apple’s iTunes Store, you can sample all of the music they sell for free, and only pay when you decide to purchase it. Of course, it seams ridiculous to compare eMusic to iTunes, given that eMusic doesn’t sell music from ANY of the major labels, and iTunes primarily sells music from the majors, but that doesn’t stop Orlowski:
“From the labels point of view, eMusic is simply great for business. While it costs eMusic much more to run its store than Apple - because it’s offers much more than an “airport kiosk” looking to attract impulse hit-buyers - it’s more profitable. eMusic employs over a hundred people providing editorial content, and it works very hard on expert-generated and user-generated recommendations. But the value for labels is greater, because the eMusic store exposes material people woudn’t otherwise see. (In his desire to make the “Long Tail” a one-shape-fits-all buzzword/religious cult, author Chris Anderson wrongly lumps iTunes and eMusic together as examples of “Long Tail”, although one is, and one emphatically isn’t). eMusic fuels the value chain.â€
Of course he fails to identify the REAL reason eMusic and other subscription services are better for business: because they are worse for the consumer. They require the consumer to pay up front for music they might not even listen to. eMusic’s monthly subscription fee is $9.99 for a maximum of 40 purchased tracks, $14.99 for 65 tracks or $19.99 for 90 tracks. That’s in addition to the cost of each purchased track, which starts at 25¢ each. So with the entry level subscription, each track brings in a minimum of 50¢ in revenue, less than half of what an iTunes purchase does. Assuming the same distribution costs of iTunes, 25¢, that leaves just 25¢ per track to be shared between eMusic, the label and the artist. That’s about a third of what is available from iTunes. Better for business and the artist indeed. Of course, the equation isn’t even valid, because eMusic will never get the major labels on board at those prices, and iTunes sells indie music and older back catalogue music for the same 99¢ per track, so the artists and labels make much more money on each iTunes track than with eMusic.
The author goes on to repeat the iPod battery lie and adds a long-debunked iTunes Store fallicy with this tidbit:
“What Apple has, then, is a subscription scheme for buying hardware - each device rapidly expires, and there is only one supplier providing a repeat purchase that’s compatible with your iTunes Store purchases. What the music business wants is a subscription scheme for buying music. Somewhere, in the middle they may one day meet.â€
We’ve already identified the first part as being misleading a few paragraphs up, so I won’t bother going into it again. The assertion that Apple is the only supplier that provides devices to listen to iTunes Store purchases on, is so ridiculously false, I can’t believe Orlowski even thinks he can get away with it. How he can completely miss that iTunes purchases can play in iTunes, which runs on any personal computer that runs Windows XP or Mac OS X, as well as the iTunes equipped mobile phones made by Motorola, is a complete mystery to me. Of course, if he could miss those most obvious of iTunes Store uses, it’s understandable that he would miss the simple fact that each and every iTunes purchase can be burned to audio CD an unlimited number of times and played on any consumer CD player on the market. For shame Mr. Orlowski, for shame.
Andrew Orlowski is so out of touch with the realities of the digital music market, that he has convinced himself, and attempts to convince his readers, that subscription music services are in huge demand:
“(Unless … they agree they’d shift more respective units under a flat fee. With a universal subscription, we suspect, Apple couldn’t build iPods fast enough to meet demand, and would begin to rival GM in size. It has the best digital music player, bar none.)â€
With numerous music subscription services on the market for years, and none of them denting iTunes sales, there is absolutely nothing to support his suspicion that people want to pay a monthly subscription for music. Period. In fact, the opposite is true. Subscription consumers should take note, since they lose 100% of their investment if the company ever goes under, since the only way to listen to your subscription music is to keep paying the provider to maintain your subscription’s status.
So where’s the Microsoft Zune angle to this article? It finally materializes in the last two paragraphs:
“Where does Zune offer Microsoft some hope? Surely not in the Soviet-style industrial design - and surely not from gimmicks such as disappearing, time-bombed songs. Or the fact it brings another incompatible DRM scheme to the public. And while it may do more than the iPod, unless it does the basics very well or better, it’ll suffer the same fate as Microsoft’s phones. Which also do lots of things, none of them particularly well, and which only gadget-heads want to be seen with.
But where Microsoft can gain some rare good-will from the music business is by nudging the public to a subscription model. Not something in the company’s DNA, you may say, but there are plenty who want to see Apple nudged there too.â€
Orlowski finally gets something right, summing up the shortcomings of the Zune quite succinctly in that first paragraph, although I feel mentioning the fate of Microsoft’s phones without mentioning PlaysForSure or MTV’s URGE seems nonsensical to me. It becomes even more silly in that last paragraph where he makes it sound like the Zune is the first device/business model to ever push subscription services.
Ignoring Microsoft’s widely adopted PlaysForSure or the Microsoft/MTV URGE alliance shows a real lack of familiarity with the goings on in the portable mp3 player and online music market. Andrew Orlowski seems to have either never heard of, or conveniently forgotten, that Napster, Real Rhapsody and Microsoft have been peddling music subscriptions to the masses for a couple of years already with little success. He also fails to provide any insight whatsoever about why Zune and Zune Marketplace will be any different.
All of the above raises real questions about why The Register wastes their time posting the poorly researched ranting of Mr. Orlowski. Doing so does nothing but damage The Register’s credibility. I would suggest Andrew Orlowski spend a bit of time researching his topics better, otherwise stick with writing about topics he is knowledgeable about as it’s obvious he has no clue about the online digital music market, Apple, iPods or the iTunes Store. Pretending to have one doesn’t help his reputation as a columnist and does a disservice to his readers. I suspect Mr. Orlowski is one of the reasons why el Reg doesn’t have a reader feedback system. In the meantime, he will remain one of The Register’s weakest writers.
September 17th, 2006
Microsoft finally went all official on some Zune details today, confirming many of the rumors that have been floating around the ‘net for a while now. The photos that were leaked weeks ago and confirmed from an FCC filing made by Toshiba were the real deal. As rumored, the first Zune device will have a 30GB hard disk, 3-inch colour screen and Wi-Fi wireless connectivity for music sharing. It will be available in three colours: white, black and brown. There will also be an accompanying online media store called Zune Marketplace and Zune media player software. Zune will supposedly go on sale this holiday season, but no price or release dates were revealed. Rumors pegged the price of the device at $299 US. We’ll have to wait to find out whether that is accurate.
So how big is it? While Microsoft hasn’t released any physical dimensions for the Zune, it’s easy enough to extrapolate the length and width using the screen size as a reference. The Zune’s screen is 3″ (7.6 cm) measured diagonally. Based on the hi-resolution photos Microsoft has released, that would make it 4.3″ (10.9 cm) long by 2.3″ (5.8 cm) wide. Discerning the device’s thickness is much more difficult due to the lack of any photo of the device’s profile, and the fact that it has a bevelled edge.The only photo we have to go by is a three-quarter view lifestyle shot. Our best guess, based on extrapolation of scale, is the unit will be about 0.5″ (13 mm) thick. So it’s slightly longer, narrower and thicker than the 30GB 5G iPod. Overall, the Zune is about 16% larger in volume than the same capacity 30GB iPod but 8.5% smaller than the 80GB iPod.
The Zune doesn’t have a scroll wheel like the iPod. That round scroll-wheel looking control is really only a 4-way navigation button. Once again Microsoft demonstrates it isn’t above making their technologically inferior user interface look like the technology leader’s. I’m sure it will fool a few unsuspecting customers though. I can only imagine how fun it will be scrolling through a library of thousands of songs with a fixed speed button. The Zune also appears to have some sort of proprietary dock connector on it’s bottom edge, no doubt in an attempt to encourage third party development of connectible accessories as the iPod’s dock connector has.
From a file format perspective, the Zune supports pretty much all the same formats the iPod does, but adds WMA and WMV formats (of course). At least Microsoft is being somewhat realistic about acknowledging that they have lost the format war in the portable space. There’s a reason they’re called PodCasts after all, and iTunes rips CDs to industry standard AAC format, so Microsoft is obviously going after current iPod/iTunes users by supporting the formats they already have. Strangely however, Microsoft has decided to not support Mac users, so for now, Mac owning iPod/iTunes users will remain out of Microsoft’s reach. Maybe Microsoft felt it would be futile to try to convert users who are already familiar with more than one of Apple’s superior products. So Microsoft is going to concentrate on the rest of users who don’t know any better (yet), only there’s one problem: people who already own an iPod, have already made a conscious decision to not use a Microsoft infested product. What’s the likelihood that they are going to switch BACK? Is the Zune that much better?
The answer to that question is NO. The Zune amounts to a cheap knockoff of the iPod, with a gimmicky feature (Wi-Fi), a cheap plastic case and a bigger screen. No scroll wheel. No iTunes. No 80GB model. On top of that, Wi-Fi and a bigger screen are going to put additional load on the battery, so expect to see lower battery life on the Zune, but I assume Microsoft will play with the numbers to make it look like the battery life is as good or better. This is easily done by measuring battery life while playing files encoded with unrealistically low bitrates to reduce the CPU workload. At least that’s what many PlaysForSure device vendors do. Price-wise, I fully expect Microsoft to bite the bullet and offer the Zune for the same price as the 30GB iPod ($249 US), although rumors had pegged the price at $299 US, which coincidentally was what the 30GB iPod used to sell for. Microsoft will be happy to lose money on this product for years to come, just as they do in many other markets.
So with the bigger screen and no doubt lower battery life being a wash, the only thing going for the Zune is the FM tuner and Wi-Fi social networking experiment. The total dominance of the iPod has pretty much proved that the majority of customers aren’t interested in listening to static-filled FM signals. I’m sure some über-geeks and teenagers are going to thing Wi-Fi is a neat idea, but in practice, how much are people really interested in listening to other people’s music? When people listen to an iPod, they want to switch off from the world or entertain themselves while they do something else by themself. It’s an anti-social activity, and try as they might, Microsoft is not going to be successful in turning it into a social one. Not to mention this music sharing feature only works with other Zunes. How often are people going to run into someone else with one?
The most likely scenario for Zune’s Wi-Fi sharing is teenage friends who hang out together at school or wherever, but they have already shared their music libraries a long time ago via their computers. From the looks of it, the sharing will only work for music purchased from the Zune Marketplace, as it will require DRM to limit sampling to 3 listens over 3 days. Microsoft would come under the wrath of the RIAA if they allowed unprotected music to be transferred at will. So kids and teenagers will have no use for it, since they don’t buy a lot of music and Adults won’t have any use for it because they have better things to do with their time and it will more than likely just confuse them like the advanced features on their cell phones.
Let’s face it, Zune is no iPod killer. It isn’t even an iPod annoyer. In fact, the only chance Microsoft has of making a market for the Zune is to integrate it closely with their XBox 360 console and add Zune Marketplace to the XBox Live online service. At least then it will offer something tangible to a select market: people who own an XBox 360 but don’t own a computer. They won’t take over the digital music market with that strategy, but they could move a few thousand units to die hard XBox 360 fans. Zune is just another product from Microsoft that proves they have no creativity or scruples. There are dozens of media players out there that are better than the Zune, and that’s before we consider the iPod. Microsoft has stabbed every one of their PlaysForSure partners in the back with the Zune, and this will come back to haunt them one day.
Microsoft has also sent mixed signals with their Zune strategy. First, they were all about giving consumers choice, and now it’s about no choice, since Zune won’t play nice with PlaysForSure or Macs. In a recent interview with Engadget, MS Corporate VP J Allard had some interesting things to say about PlaysForSure:
Engadget: So up until this point Microsoft’s digital music strategy has been largely to create an ecosystem and be a supplier of a DRM platform to manufacturers and online music stores. PlaysForSure was the thrust of Microsoft’s strategy until the announcement of the Zune. How does PlaysForSure fit into Microsoft’s strategy going forward? It doesn’t appear that the Zune will be compatible with any PlaysForSure retailers. How does that affect Microsoft’s current partners who rely on PlaysForSure?
I think there’s two answers to the question. First answer is, this whole digital music revolution is really just starting. There’s still a lot to be figured. We certainly don’t think we have it all figured out, and we think there will be change. The second thing is that specifically when it comes to PlaysForSure, think about you might buy a Windows PC versus how my mother might buy a Windows PC. My mom calls up Dell and says, “I have seven hundred bucks, get me a computer. What’s the best thing I can get?” She doesn’t specify the keyboard, the monitor, the memory configuration. The conversation might get as specific as, “Do you think you want to burn DVDs?” Then she gets a product that shows up and it’s all pre-installed.
There are other people that go to Fry’s Electronics and hand pick the graphics card, the case for their computer, they build a Windows-based PC from the ground up. We have a solution for both of those things. We at Microsoft have a platform that is Windows, we have a solution for the crowd of consumers that are very deliberate about how they build their PC solution, and we also have a solution for people who just want turnkey. And I think that’s how these two strategies complement each other. The PlaysForSure is still a program we’re going to invest in, we still have a lot of partners there, and for a class of consumers who that want to have a hand-crafted media media experience and maximize their choice, we have an answer. There’s another class of consumers that just want to get digital media, and they just want to be able to go to one store and have it all just plain, dead simple, and don’t want to know what a codec is.
Engadget: Wasn’t that the point of PlaysForSure?
Well, it’s like asking a question about Windows — and the point of Windows was to bring personal computing to the world — some people are going to pick their PCs, they’re going to pick their monitor, they’re going to pick their printer, they’re going to pick their graphics card, and combine the things that they’ve chosen. Other people just a want a system that’s end-to-end — all compatible out of the gate — and that’s what Zune does. Zune says there is no choice; you get a Zune device, you hook it up to the Zune service, and it just works.
Engadget: When PlaysForSure was introduced, the premise was, we make it simple so that you don’t have to worry about whether your player works with the music you’re purchasing…
That continues to be the premise for devices that are branded in that category, and we think that we’ve clearly done a lot in that program, where there’s a lot of devices out there, there are a lot of services out there, there are a lot of partners, and there are a lot of satisfied customers. We like that program. We’ve also found that there’s a category of customers that say, “Give me a brand experience, advertise it to me on television; I want to be part of the digital music revolution, and that solution [PlaysForSure] doesn’t work for me.” So they’re two complementary solutions — not everyones gonna want Zune and not everyone’s gonna want PlaysForSure. They’re different paths there, and we’re okay with both of them.
Spoken like a Politician. I’m sure your PlaysForSure hardware and online store partners are okay with both strategies too Mr. Allard. 
What I’d like to know is who are all these people who are asking for a brand experience? People buy the iPod because it just works and works damn well. They don’t buy them because they are craving a brand experience and want it to be advertised to them on TV. Sure, the advertising may be part of the reason they decide to buy an iPod, but that’s not the same as people asking to be advertised to, and in a way that’s insulting to the people who Microsoft is targeting with the Zune.
Allard and Microsoft can dance around it all they want, but the truth is they are getting their asses handed to them on a plate by a company that they are used to beating. Their strategy for the last 5 years, including PlaysForSure, has failed to stop the Apple juggernaut. So what does Microsoft do? They fall back on what HAS worked for them in the past: copying Apple as closely as they can. Only Apple has already won, and people don’t want what Microsoft is offering anymore. Zune will contribute to Microsoft’s failure, as consumers get even more confused by the alternatives to the iPod and Microsoft’s partners start to turn against them in a desperate attempt to hold onto what little market share they still have–Apple really should be thanking Microsoft for making it so damn easy to kick their ass.
September 15th, 2006