Slashdot Mirror
Microsoft Considering Subsidizing Zune Sales
grouchomarxist writes "Microsoft is considering selling the Zune subsidized like a cellphone, according to an excerpt on MarketWatch from a PC World magazine interview with Microsoft's Zune marketing director, Jason Reindorp. According to the article: 'The spokesman said that Microsoft first considered the cellphone-like distribution plan after seeing interest in its Zune Pass subscription service, which offers monthly paid access to songs on the Zune Marketplace, a competitor to Apple's iTunes store. Though he declined to say how many subscribers currently use Zune Pass, the spokesman said subscriptions rose 65% during January.'"
So... that's 165 people?
or does this begin to sound like the ngage
The war with islam is a war on the beast
The war on terror is a war for peace
As predicted in October, 2006, based on keyword rate-of-change, Zune is a flop.
r y=zune_meme_rerun
r y=zune_meme_successful_prediction_so
http://www.realmeme.com/roller/page/realmeme/?ent
I believe the Microsoft attempted a viral marketing / meme manipulation scheme over the Internet, but I can't prove it. It's getting harder and harder to "advertise", partly because of the flood of information from the IT age, partly due to increasing resistence to memetic propagation.
http://www.realmeme.com/roller/page/realmeme/?ent
Enough marketshare has been lost that reducing the base price isn't likely to spawn more sales. The music will still cost about the same, the DRM is about the same, and the feature comparison is about the same.
In this case, Microsoft's just admitting that it has an unsuccessful, come-lately design that isn't taking the market by storm. In the mobile/cell business, you sell hardware differently, based on features, pizzaz, functionality, and rate plans that suit an audience. Only the rate plan might change, but the RIAA is going to charge Microsoft what it charges Real and Apple; they're unlikely to discount the 'minutes'.
Bad move: it cheapens the product rather than advancing it.
---- Teach Peace. It's Cheaper Than War.
Subsidising the cost of hardware in the hopes of making up the money on content has worked wonders for the profits of the XBox division...
I know, this is a different business model, but it looks like J Allard just trying to do what's "worked" in the past.
With MS dropping the price, and with Apple/EMI selling non-DRM AAC tracks (which the Zune supports), MS should be able to sell literally DOZENS more of these bad boys!
MS: We have a 65% increase in subscriptions! WOO HOO!
interviewer: and how many people is that, exactly?
MS: well, 13, actually...
(dunno if my math is right...)
Nostalgia's not what it used to be.
In particular, Quicken OWNED the money market. They lost to MS money because it was subsidized by being included for free on Windows. Likewise, XBox when it first came out got nowhere. When MS cut the prices WELL below the costs, then it started to pick up. Even now, they are still not at a break-even and the xbox division is still a major money loser. But I would be willing to bet that 1 or more of the competitors will be wiped out shortly and then MS will own the market.
I prefer the "u" in honour as it seems to be missing these days.
http://www.google.com/trends?q=zune&ctab=0&geo=all &date=all
The news items that have been picked out are priceless (in chronological order):
-Microsoft Confirms Zune
-Microsoft Unveils Zune
-Microsoft launches Zune
-Zune misses top-10 sales list
-Zune Executive to Leave Microsoft
So 20 people were subscribed in december, 33 people signed up in jaunary (probably half of em were christmas gifts to family from microsoft employees).
And Microsoft looked at these numbers and saw the future of the zune.
They give us cheap/free Zunes. We re-program them to run Linux. Didn't we do something like that with the Xbox?
o r-selling-the-blades/
This is the old 'give away the razors, make the profit on the blades' trick.
http://itotd.com/articles/295/giving-away-the-raz
I don't think they can subsidize Zune player. If they want to subsidize, they must have some way of recovering money. What model do they have to recover money? According to Apple, only 22 songs are being purchased for every player. If the figure for Zune is similar, there is no way they can recover any significant amount. Other model would be for them to sign up contract like cell phone providers do. But wait, cell phones are useless without service and hence the service providers can force contract. MP3 players are useful on their own and hence it would be hard to force users into contract. So my feeling is that microsoft may be exploring to subsidize, but it is unlikely to actually do so.
The only problem is that I don't see how they could make more than $100, even on a two year contract. which is half the retail cost. I suppose if they are willing to lose money on the Xbox, then they can do the same thing on the Zune.
BTW, when I checked on google, it appeared no one has paid for the sponsored on the keyword zune, just the side ads. It is interesting that for ipod, apple has paid a sponsorship. It is also interesting that MS has done so for Vista. But not Zune.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Even the cell phone industry hates this model. They could just come out with something innovative that works well. Or even buy a company that produces such a product. But no, instead, they choose to become the low price discounter.
MS, you will have had 9 months or so to come out with a competitor to the soon-to-come iPod video. Instead you waste your time on marketing gimmicks instead of product. Why not bring out a nano-sized movie player with touchscreen controls? Give me an e-mail and I will design it for you and it will be better than that piece of crap Zune for a very minimal amount of money.
Although I have to admit a subscription based music service is probably the long term way to go if for no other reason than to have access to music wherever without having to drag along a hard drive (or 200GB iPod).
To quote Billy Preston's song: "Nothing from nothing leaves nothing."
I'm going to agree with your detractors.
A zune, even with it's questionable attributes, is going to be quite attractive at a $49 or $99 pricepoint - even if you get stuck with a year or two of $16.95/mo service. Americans will delay any capital investment - especially for entertainment - even if they pay through the nose on a regular basis. Cell phones, cableTV, satTV have far and away proven this to be true.
I hate to admit it, but MS might - I say might - be on to something here. Something bad, imho, but I'm pretty far outside of the mainstream when it comes to this stuff.
Now, they could end up being the first mouse instead of the early bird - I'm thinking prodigy and pop-up ads at the moment - but this could herald the beginning of a new paradigm in portable music. (Man, that's a lot of marketingspeak - I feel slimy just typing it).
Is it just my observation, or are there way too many stupid people in the world?
On one of the Microsoft employee message boards last year one of the Home Entertainment guys was commenting about how the Xbox 360 was supposed to fund the Zune's low price and help undercut the iPod line. Of course with the insane hardware defects and the absurdly high costs Microsoft is having to spend replacing dead consoles over and over again has added hundreds of millions in red ink to the already bleeding Xbox product. Add to that things like the move to 65nm has been delayed by at least six months and the poor sales of the console - it is selling as poorly as the first Xbox - and any hope of the Xbox line being able to help drive the Zune out into the market are pretty much done.
I actually saw a guy with a Zune yesterday on the subway. So far: Number of Zunes seen - one. Number of Creative Zens and other off-brands seen - a few. Number of ipods seen: About 10,000.
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
MS obviously knows how much we all love the albatross that is cellphone vendors' lockin tactic. At least the cell phone guys have oligopoly, what's MS got with Zune?
Subsidising the cost of hardware in the hopes of making up the money on content has worked wonders for the profits of the XBox division...
And Microsoft learnt this from Nintendo, Sony, Sega, Atari, et al.
I know, this is a different business model, but it looks like J Allard just trying to do what's "worked" in the past.
Actually this isn't a different business model at all. If Apple is making a profit on the iPod, then good on them. Microsoft has long used their profitable divisions to underwrite their heavy losses in other endeavours -- Zune in this regard is no different. If Microsoft had the plan right from the beginning they could have run it exactly the way game consoles work, as long as they continued to sell a lot of music through their online store or other stores which paid them a fee per tune.
That Microsoft thought they could just muscle in and proclaim what they had to be great and desirable in every way was clearly another Bay Of Pigs mindset at work. Microsoft seeks to impose themselves through the ubiquity of their interfaces and tie everything to Windows as a common point.
Microsoft should just cut their losses, offer everyone a payment to take it back and close up shop.
A feeling of having made the same mistake before: Deja Foobar
From the article: "The spokesman said a subsidized Zune is only one of a series of "wild ideas" being considered by the company's entertainment and devices division..." How about making the device more useful as a wild idea? Microsoft's ultimate sin is that they're lazy and cheap. They'd rather loose the franchise then spend the time and programmer resources to add features that people would find compelling. For starters, how about wireless syncing, web browsing, having an Outlook client, and being able to read Hotmail mail? Removing a ton of the DRM crap would also be nice. What? the music companies won't play ball? &*(%ing buy one of them and throw management out on its ear. You've got more cash than most 3rd world nations. /grump off
According to "Zuneinsider" Cesar Menendez @ Microsoft, Jason's comment was taken out of context:
:)"
a -to-co-author-zune-for-dummies-book.aspx#comments
"as for the 'free zune w/ subscription thread,' that was taken out of context. Jason was speaking of it as a hypothetical, and it got reported on pretty widely as the official plan of record. the trouble w/ hypotheticals + the web + zune fans, I guess
from http://zuneinsider.com/archive/2007/04/04/zuneram
Subscription music services make very little per customer at $15/month. The real profit is in the device sales. I don't see this happening anytime soon...
[sb]
Home and Entertainment division lost $1.2billion dollars in 2006. If that is "worked", then I have a bridge to sell you.
Engineering is the art of compromise.
You can't get it in the UK yet, you insensitive clod!
for Zune Pass subscription service. No one knows what Zune Pass subscription service is and have interest but it changes by this article.
I guess the E.T. cartridge solution was ruled out on environmental grounds?
A pizza of radius z and thickness a has a volume of pi z z a
Maybe they should try a new marketing campaign with some new mottoes?
Zune: It's brown for a reason.
Zune: Now with 50% more draconian DRM!
Zune: More space than a Nomad! Wireless! Lame!
Love squirting friends & strangers? Buy a Zune!
Uhh, never mind. It's pretty hard to sell those things...
I dunno about what everyone else thinks, but I don't really believe that price is the major reason that the Zune is an apparent 'flop'. Sure it has interesting features, but in my opinion (any my wifes), the thing is too-big, and too-ugly. The market is so fashion concious (hence the color options appearing, just like cell phone covers) I don't think the Zune would do much better if it was priced $100 less than an iPod. Now add in the easy in-car integration and home-audio integration available for the ubiquitous iPod, and you have quite a tough sell....
:)
Besides, until Microsoft creates its own 'reality distortion field' like Apple has, they are basically out of luck
Brad
pretty predictable considering WindowsCE/PocketPC/PocketMobile/etc is a blistering success and it only cost Microsoft over $10 billion and 10 years to purchase this success. But hey, they were only fighting Palm for that market and now they actually have to purchase marketshare from not only a consistently good design house but also one that captured the minds/hearts of non-geeks.
I predict it'll take another 10 years but this time, it's gonna cost Microsoft atleast $20 billion in losses to do it. And, in 10 years, Microsoft will not be the same company it is now or was in the past. So, in about 5 years, you'll want to watch out for people driving their cars while attempting to reboot the Zune music player system.
Microsoft; the maker of innovative products businesses must be paid to sell and customers must be paid to use.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
Wow, that was a screamer! Just as well it went over their heads or they would have been knocked clean off!
Hint to those replying: There is a reason ObligatoryUserName used quotes on the word: worked.
Which competitor do you expect to be wiped out? Nintendo is making money hand-over-fist and Sony has enough cash to sell PS3s at a loss for years...
(And Quicken never lost to MS Money...it outsells MS Money by a very large margin.)
The cake is a pie
welcome to the social! ... *crash*
... *crash*
... *crash*
... *crash*
... *crash*
sign up for a zune pass!
welcome to the social!
sign up for a passport account
welcome to the social!
provide name, address, telephone number, age and credit card number to complete registration!
skip
welcome to the social!
sign up for a zune pass!
welcome to the social!
sign up for a passport account
welcome to the social!
provide name, address, telephone number, age and credit card number to complete registration!
skip
welcome to the social!
sign up for a zune pass!
welcome to the social!
sign up for a passport account
welcome to the social!
provide name, address, telephone number, age and credit card number to complete registration!
ok
welcome to the social!
sign up for a zune pass!
welcome to the social!
sign up for a passport account
welcome to the social!
provide name, address, telephone number, age and credit card number to complete registration!
cancel
open options panel
uninstall
*defenestrated zune plummets 7 floors & impacts pedestrian, inducing another case of severe cranial trauma*
So you take 20 subscribers, add 65%, and you get 20 + (0.65 * 20)=33. So you have 20 subscribers, add 65% (another 13) and now you have 33 people. The numbers work out perfectly! Too bad it doesn't state how many of these users are running the good-old brown zune! I can only dream of plugging my brown zune into the radio speaker of my Lada and crusin all over town with the windows down. Kewel baby! I am *such* a wild and crazy guy!
A company using money gained from another field in order to price something artificially low so as to stifle competition - i thought that was monopolistic and anti-competitive. Certainly supermarkets (here in the Uk at least) are prohibited from selling things artificially lower than cost in order to force out small businesses - why doesn't the same apply here?
If Apple happened to ONLY make iPods, and Microsoft subsidised the Zune's sales, wouldn't they be trying to force Apple out of the market, by using their huge capital gained from software? That sounds illegal to me.
How about, Buy Vista and get a FREE Zune... Oh wait.... Vista DRM doesn't support the Zune or Fairplay. Almost a good idea.
33.
How many times are we going to keep seeing this meme, about Microsoft needing to bribe people to use their products?
m l
l
f orawhiteguy.html
"Microsoft Bribing Bloggers With Laptops":
http://slashdot.org/articles/06/12/27/1423234.sht
"Microsoft Financial Incentives for Live Search Data":
http://slashdot.org/articles/07/03/17/035227.shtm
And now this Zune one. Any other examples?
It must be nice to have billions of dollars of extra cash to be able to spend on bribes to try to buy market share, but that doesn't seem like a winning long-term business strategy. Surely the financial analysts will see through the bankruptcy of these tactics?
Apple's advertisements just utterly nailed Microsoft's lack of cool. Microsoft is like that annoying boorish nebbishy kid in the neighborhood who wants so badly to fit in and just annoys everybody by mimicking what they do, and then winds up "buying" friends ("I'll let you have my Robo-puppy 2000 if you'll play with me")
Hey Microsoft? Go home. Grow up. Get cool. And then come back and play. If the legal system is going to anthropomorphisize companies as though they are individuals, well, then Microsoft, you are such an out-of-touch individual, it's getting embarassing. "Squirting"??? "The social"??? It's like that guy in the Offspring song who was pretty fly for a white guy:
"He needs some cool tunes
Not just any will suffice.
But they didn't have Ice Cube
So he bought Vanilla Ice.
Now cruising in his Pinto, he sees homies as he pass.
But if he looks twice
They're gonna kick his lily ass."
http://www.plyrics.com/lyrics/offspring/prettyfly
Microsoft, Apple and Google are kicking your lilly ass.
This isn't a bad idea, really. You would pay about 50% of the cost of an ipod, pay a subscription fee of about $10-$20 per month, and have unrestricted legal access to virtually any song. For a slightly greater fee, TV shows and video as well. For people that, on average, pay for more music per month on itunes than this, it's great.
EXCEPT : Microsoft has a history of loading products down with extra "features" no-one uses, but having the basic functionality be SLOW and buggy.
If *I* were a developer for a consumer product like this, I would have just TWO goals for both the hardware interface and software side :
1. It must be VERY EASY to understand exactly what it is doing, with a minimum of options presented to the user. More advanced options should still be there, but in menus.
2. It must be FAST and RELIABLE. As in, LIGHTING fast - no more than about 100 msec delay for navigating ANYWHERE in the UI on the player, and it should load and be responsive to commands within 5 seconds on a 1 ghz PC, for the uploading software. If it is a subscription service depending on a server for authentication, the server should not be ever down more than 10 minutes per week. To accomplish this, there must be hot backups and a software architecture that allows for maintenance and updating without shutting down anything.
As we all know, Microsoft fails miserably at the two goals. Funny thing is, the products they make that people like : Microsoft Office 2003, the Xbox, both somewhat meet these goals...(I haven't tried Office 2003 on a 1GhZ machine, but when I finally installed it this year, I was surprised at how little disk space (180 megs) and load times it consumed)
Google has always met these goals.
I've never understood the Java "business model", especially when Sun sued Microsoft to require Microsoft to ship a Java VM along with Windows.
I mean, when Jobs irresponsible for said that recording companies ought to eliminated DRM, the press reported that "Executives at the major labels dismiss Jobs' challenge, saying that eliminating DRM isn't going to happen," and Reindorp, "dismisses Jobs' remarks 'irresponsible.'"
Turnaround is FairPlay... so Jobs ought to suggest that it was irresponsible for Reindorp to speculate that Microsoft might engage in predatory pricing.
"How to Do Nothing," kids activities, back in print!
(Sorry, accidentally hit "OK" when my article was in an unusually incoherent state... let's try again...)
When Jobs said that recording companies ought to eliminate DRM, the press reported that "Executives at the major labels dismiss Jobs' challenge, saying that eliminating DRM isn't going to happen," while Reindorp, "dismisses Jobs' remarks as 'Irresponsible.'"
Turnaround is FairPlay... so Jobs ought to suggest that it was irresponsible for Reindorp to speculate that Microsoft might engage in predatory pricing.
"How to Do Nothing," kids activities, back in print!
I guess they have too many of these horrid little things in stock to dump^Wsell them all on Ebay.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
This article was written by a member of the Microsoft Zune team. It basically says that the music industry charges $11.95/per user for subscription music on portable devices. Microsoft and most of the other subscription services charge $14.95/mo. That's only a $3.00/mo profit. Even if they give away a $60 1GB flash player. It still would take them 20 months just to break even.
i ce-finance-101.html
http://www.zunester.com/2007/01/subscription-serv
This has little to do with what they make on zune players the money is in the media. If they can over
take Apple in the format war then they own the media and the only means by which to play it.
Got Code?
So where do I apply to have microsoft buy me free AAC non-drm EMI for my iPod, er I mean my Zune, *cough*...
will be out of business in 10 years from now - no company can continue to screw up as often as they do and survive. The zune is so awful that giving it away wouldnt help. Its a dog (apologies to dogs) Music subscription just doesnt appeal - we build our music collections over 5 - 25 years and we keep them. Thats the nature of music buying, and it wont change. Most people now have all their cd's on their iPod, plus a chunk of illegal mp3's plus a few purchased tracks. Thats the deal. The Zune and M$ are so screwed its not worth talking about. They wont even get the new DRM free stuff right.
So will the Zune 360 be subsidised too? :)
Who would it have hurt
if the premature squirt
had lasted a reasonable time?
Well, the R.I.A.A.
which still to this day
sees squirting as some sort of crime
If you own a Zune
and seek to commune
with others to squirt and to share
You ought to buy two
for they're scarce and they're few
to see one in public is rare.
Cake or Death? Cake Please!
I am KIDDING!
But geez, isn't the fact that the thing is fucking ugly reason enough? It don't even matter that the device is apparently available in other colors then brown, in peoples mind the device is brown and brown is NOT the color of an Mp3 player. It hasn't been the color of any consumer electronics in decades. It is the color of old stuff. When wood was still the only thing people found acceptable in the house so everything had to look like it was made of wood, even if it mostly looked like plastic.
The ZUNE is the ultimate reminded that first impressions count. It don't matter if you buy a black Zune, it will still be brown.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Not sure how feasible this is but I know it's being worked both in and outside of MS. If OS X or Linux get a viable solution first, Vista & future iterations of Windows are effectively dead. Many people are obviously sick of Windows and would like a viable alternative.
Meanwhile, MS keeps piling on the bloat in the most inconsistent ways.
At this point I find Vista to be slow & unreliable compared to XP, and the UI seems to have no real improvements. They've more or less just moved things around and tried to make them prettier. There are some cool features under the hood but nothing (so far) that I can't live without or tack on to XP.
Microsoft should just have the states subsidize, via taxes, giving a Zune to every child in Michigan.
/ 0417219
An iPod For Every Kid In Michigan:
http://apple.slashdot.org/article.pl?sid=07/04/07
No sig for you! Come back one year!
...aren't "subscribe" and "DRM-free" like------incompatible?
That $X per month forevvvvvvvvver model must appeal to them. They're also trying to get suckers to sign up for the same deal for rent-an-application on the web. Personally, I'll buy my songs or applications so that they're mine forever, and don't go away when I stop subscribing.
I suppose it comes down to how you look at music.
You can chose to look at music as something your consume versus something you collect.
I get some joy out of the physical heft of a CD. The liner notes. The artwork. The ritual. But not much. Not nearly as much as, say, a book. But more than a DVD which is just a plastic disc in an plastic box.
Really, the joy I get from music is all about the consumption. Not the collection. And, to continue your "20 years" example.
Over the course of 20 years, on any average year, you had 126 songs to listen to. That's it. Your COLLECTION may have value, but your ability for CONSUMPTION is woefully small. For my subscription, I instantly have access to a ludicrous amount of music.
There is no appreciable resale market for CDs. The almost spiritual connection between a record and its collector--with the stores and true artwork and the uniquely small press runs--is all but gone with compact discs. They have no soul.
The collection is worthless.
Consumption is everything.