Should Microsoft Really Do Media? A Look at Zune

Feb 16, 2012 by

If you ask people what kind of company Microsoft is, you may get varying answers (snarky quips aside), but the responses would probably converge around “software.” Windows, Office, Outlook, database software, the myriad of business tools…are all software. Sure, there are other aspects of Microsoft, including a hardware division where they make some great mice and keyboards. And of course, there’s the popular Xbox franchise and even Bing.com, but it’s arguable that these consumer-focused products actually supersede their parent company’s brand (i.e., how many people really think that they have a Microsoft game console when they slip Call of Duty into their Xbox 360?).

As a result, unlike Apple with iTunes and Amazon with their music and video services, Microsoft is simply not thought of as being a media company. Of course, that’s not for a lack of trying. MSNBC, after all, was a partnership between Microsoft and NBC (which has since dissolved on the cable news side).

Which leads us to Microsoft’s Zune service. Zune is a solid and proprietary media distribution and e-retail service that evolved from a failed portal media device strategy. The service was fairly innovative when it was initially designed and launched, but so much has changed in the past few years, it is questionable if Zune can practically compete in the rapidly evolving digital media landscape. Which begs the question: should it compete? Should Microsoft maintain a closed content distribution and e-retail system based primarily on the similarly-closed iTunes model?

Today’s Zune service shares features with a few of the major competing service out there—including music streaming (Zune Pass) and music/video content purchasing (Zune Marketplace). Despite this unique combination of content streaming and purchasing, Zune still does not provide a transparently compelling value proposition that itself would drive the adoption of Zune-enabled clients. For instance, what percent of consumers do you think buy a Windows Phone or an Xbox 360 due to Zune service integration? By comparison, Amazon (and, increasingly, Google) provide client applications across multiple platforms to encourage as many people as possible to access their content, while also selling devices themselves that provide seamless consumption of their content. This approach is “open” as compared to Zune and iTunes. And it’s working.

Due to the lack of market success of Zune portable media players, combined with the lackluster sales and market penetration of Zune-enabled devices like Windows Phone, the Zune service itself feels a bit out of sync with the current media distribution landscape. It might be a different story if Windows Phone devices had huge market share, which drove the mass adoption of Zune, which would therein drive demand and new innovation. But that’s just not the case as things stand today.

When discussing media distribution systems, it’s hard to avoid talking about digital rights management (DRM). There was a time not long ago when Microsoft felt that they had an obligation (to their position as industry standard-bearers and to the industry at large) to roll out the universal standard for DRM. Remember PlayForSure? Zune represented a full-fledged retreat from this “solution for all” position to a walled garden, safe-house model—mimicking Apple’s iTunes model. There’s an argument to make that Microsoft serves itself best when going with their unique strengths vs. emulating Apple’s approach, but it is also understandable that Microsoft felt they had to respond to a failing model of PlayForSure and the roaring success of iTunes. However, with emerging players like UltraViolet looking to make headway in video DRM, while audio DRM has all but disappeared from the scene, it truly puts Zune’s walled garden approach into question.

When considering the evolving dynamics of DRM, the newer, more socially-aware audio streaming services like Spotify and Rdio, and combine this with the continued growth of video services like Amazon, Hulu and even YouTube—it is becoming increasingly challenging to see where Zune fits. And, strategically, it makes one wonder if Microsoft would better serve itself if it were a software innovator that focused on media aggregation and delivery vs. being a media distributor and e-retailer.

Sure, Zune is Microsoft’s proprietary walled garden that ensures a simple content acquisition experience for compatible devices, including Windows PCs, XBoxes, and Windows Phones (and, disappointingly, not Windows Media Center). But is that going to be satisfying enough if the options outside the walled garden start looking more appealing than what’s going on inside the safe-house?

Related Posts

Share This

Sponsor

  • Anonymous

    Great article!!! It sums up many of my thoughts about the
    Zune Market. I like that Microsoft has Zune as an alternative to iTunes but I
    have recently found out Zune’s DRM is so incredibly lame that I will NEVER pay
    money for Zune Video content. Case in point, I downloaded a FREE TV show from
    the Zune marketplace on my Xbox. First the good. After downloading the content
    I was able to download it on my other Xbox’s (when signed into live of course),
    my PC, and sync it to my Windows Phone and watch it whenever. Now the BAD!
    After signing in with my wife’s Xbox live profile I could not watch the video
    because it was DRM restricted to MY Xbox live account. So what Microsoft is
    telling me is that if I purchase a bunch of movies on my Xbox downstairs (which
    I never have thank goodness) with my Live ID, then I go upstairs and sign in
    with my Live ID to watch some ESPN3 or Netflix (which I MUST sign in), the rest
    of the family cannot watch the movies I purchased downstairs while signed into
    their Live accounts. And this is after PAYING the Xbox live service fee to
    Microsoft for the privilege of accessing streaming services which are offered
    for free on other devices. This DRM restriction is so incomprehensibly stupid
    that I am at a loss for words to describe it. Even if I ponied up the extra
    cash for the Family pass I doubt it would fix anything due to the content being
    tied to a single Live account. Does anyone at Microsoft have families???
    Perhaps they do but I guess their pockets are so deep every person in the
    family has their own individual movie collection. Even iTunes lets different
    people share DRM content because they can all be tied to the same master iTunes
    account. Why doesn’t Microsoft have a master Live ID for purchases and DRM
    which can be shared with sub accounts? And don’t get me started on Windows
    Phone which has the same problem with app sharing because everything is tied to
    your live id on the phone. Microsoft better get this fixed with Windows
    8/Apollo because it is a mess. Even Ultraviolet allows you to share your
    content with 6 family members on 11 devices SIMULTANEUOSLY. Get a clue
    Microsoft!

  • Anonymous

    Great article!!! It sums up many of my thoughts about the
    Zune Market. I like that Microsoft has Zune as an alternative to iTunes but I
    have recently found out Zune’s DRM is so incredibly lame that I will NEVER pay
    money for Zune Video content. Case in point, I downloaded a FREE TV show from
    the Zune marketplace on my Xbox. First the good. After downloading the content
    I was able to download it on my other Xbox’s (when signed into live of course),
    my PC, and sync it to my Windows Phone and watch it whenever. Now the BAD!
    After signing in with my wife’s Xbox live profile I could not watch the video
    because it was DRM restricted to MY Xbox live account. So what Microsoft is
    telling me is that if I purchase a bunch of movies on my Xbox downstairs (which
    I never have thank goodness) with my Live ID, then I go upstairs and sign in
    with my Live ID to watch some ESPN3 or Netflix (which I MUST sign in), the rest
    of the family cannot watch the movies I purchased downstairs while signed into
    their Live accounts. And this is after PAYING the Xbox live service fee to
    Microsoft for the privilege of accessing streaming services which are offered
    for free on other devices. This DRM restriction is so incomprehensibly stupid
    that I am at a loss for words to describe it. Even if I ponied up the extra
    cash for the Family pass I doubt it would fix anything due to the content being
    tied to a single Live account. Does anyone at Microsoft have families???
    Perhaps they do but I guess their pockets are so deep every person in the
    family has their own individual movie collection. Even iTunes lets different
    people share DRM content because they can all be tied to the same master iTunes
    account. Why doesn’t Microsoft have a master Live ID for purchases and DRM
    which can be shared with sub accounts? And don’t get me started on Windows
    Phone which has the same problem with app sharing because everything is tied to
    your live id on the phone. Microsoft better get this fixed with Windows
    8/Apollo because it is a mess. Even Ultraviolet allows you to share your
    content with 6 family members on 11 devices SIMULTANEUOSLY. Get a clue
    Microsoft!

  • Anonymous

    Out of curiosity I signed into the Zune software on my wife’s Live ID and was able to play back the DRM’ed content no problem so that is reassuring. Why the restriciton on the Xbox though is puzzeling.

  • Anonymous

    Also played in Media Player so DRM is tied to the PC and not the Live ID apparently.

  • Anonymous

    Also was able to play the show on an Xbox in extender mode which is great except for the part where Microsoft is going away from Media Center to Xbox as it’s go to big screen video platform.

  • http://gregsedwards.wordpress.com Greg Edwards

    I do subscribe to Zune Pass, and I love the simplicity of being able to listen to just about anything I want, whenever I want, across my phone, Xbox, and PC. For me, it was one of many reasons I chose a Windows Phone, but I do see your point. Zune is the de facto standard experience on WP7, and all other services are treated as second class citizens. I keep a lot of my personal music collection on my WHS, and accessing it on my phone, while possible, is a long and arduous process. It’s not elegant at all. So even if you choose a service other than Zune, it’s still hard-wired into the phone’s UI all over the place. And as great as Zune is for music and podcasts, what about movies, TV series episodes, and other video content? Try renting “Rise of Planet of the Apes” from the Zune Marketplace and watching it on your phone. I think these days, people expect a more homogeneous experience from their paid services across any device. Don’t give us a watered-down version, we want the full experience!

    Also, as a loyal Media Center enthusiast for years, what chaps my hide is that Microsoft has done nothing to make Zune content available through the Media Center UI. I want to be able to fire up my HTPC, launch Zune Marketplace, rent a movie or show, and watch it. I want to be able to listen to that Zune Pass content that I pay $10 a month to hear! Sure, I can drag out my wireless mouse and keyboard to launch the Zune software, but it doesn’t exactly offer remote-friendly navigation. And the lack of any social integration with Zune is a real strike against the platform, too. Yeah, I know Microsoft would be happy to sell me multiple Xbox 360s at $199 each, along with an Xbox Live account for an additional $5 per month, but a Zune Media Center app for my HTPC should be a no-brainer. Then again, where’s the support in Media Center for Spotify, Rdio, Pandora, Facebook, Twitter…

    Don’t get me started. I hope Microsoft gets their media strategy ironed out in time for the Windows 8 release.

  • http://twitter.com/VINYLFREAK TIM BLACK

    I have been a Zune Pass subscriber for well over two years now. When I started my Zune Pass subscription I did not own a Zune , Xbox or a Windows Phone. Some people thought this very strange. My wife and I are both big music fans and listen to music at home , on a daily basis. Even though I have been a huge Media Center fan over the last 6 years, I actually prefer the Zune SW UI for music playback, rather then the Media Center UI. With my HTPC being hooked directly to my TV and my Home Theater sound system behind it, the Zune SW shines.

    When I started my Zune Pass subscription , the price was $14.95. This gave you access to millions of song titles plus the option to download and keep 10 songs a month. The 10 songs you keep are high quality 320kbps mp3 files which you can play on any player that will play mp3 files. Since I would normally buy at least one CD a month, I thought that Zune Pass at $14.95 was a great value. I still believe that. When Zune Pass changed there pricing structure a while back to $9.95, I choose to stay at the $14.95 subscription level. $5.00 for 10 320kbps mp3s of my choosing is a good deal. I do however, realize that my use case may not ,be everyone’s.

    I do not purchase any Videos from the Zune Marketplace. Between my 5 tuners in my HTPC, Netflix subscription and my Amazon Prime membership, we have more video content choices to watch than we have time for. We are a retty much a Windows Household. All of my Zune Pass music content can be played on all 3 PCs in our house. It can be played through Windows Media Player, the Zune Software and through Windows Media Center. I have Never, not been able to play Zune Pass subscription music content within the Media Center UI.

    In November of 2010, I purchased my wife and myself two Windows Phone 7s. This purchase was strongly motivated by my love for the Zune SW and WP7s tight integration with the Zune Pass. On our WP7s my wife and I both have access to the millions of song titles in the Zune marketplace. You can stream them or download them locally to the phone. I normally download directly to the phone , so I don’t use my data plan.
     My wife and daughter also own i-pods. The audio playback of the WP7 is far superior, IMHO. While the now defunct Zune mp3 is gone, it was also superior HW compared to the i-pod when it came to music playback.

    Windows Phone 7 is a new and still young platform. I wouldn’t count it out yet. Its just starting to get going. With the addition of the new Nokia and HTC phones coming out, I see adoption of WP7 rising , not declining. As far as the Zune Pass model, I much prefer the subscription platform, than the i-tunes pricing structure. Being able to download as much music whenever I want, is a dream come true for me. It has been awesome, for music discovery! I can access it at home , work or in my car, its great!

    Microsoft has been making a push to make the Zune Marketplace more widespread. I don’t see it going away anytime soon. Like other commentors , I would like to see some sort of direct integration of the Zune Marketplace within Windows Media center. I am hoping to see a more Zunelike music playback UI in the upcoming Windows 8 version of the OS.

    Zune Pass isn’t for everyone, but it works great for my use case. I just wanted to add my perspective as a happy Zune Pass subscriber for over 2 years.

  • Pingback: Rethinking Microsoft's Media Platform | The Digital Media Zone()

  • Pingback: Microsoft Should Cut Windows Media Center from Windows 8 | The Digital Media Zone()