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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.'"
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.
1. Music subscription services are pretty popular. Perhaps you don't like it, but I've turned many people on to it and I've gotten a lot of positive feedback from friends and family. You're not paying for music thats stops playing when you stop paying. You're paying to listen to HUGE, GIGANTIC libraries of ANY SONG YOU WANT, whenever you want, wherever you want.
Your comment like saying "Nobody would PAY for Cable Television. It makes no sense. Few people are willing to shell out money for television that stops playing when they stop paying"
2. Your comment about iTMS having TV & movies is funny. Are you actually suggesting that a subscription model wouldn't work well for TV shows? I mean, what makes you think that MSFT couldn't offer TV as part of their subscription price in the future? When iTMS launched they didn't have TV in the beginning, either. You do realize that people have been buying into the subscription-model for TV for, oh, 30 years now?
3. I love my iPod and I love iTMS. But as soon as I realized that I couldn't burn my TV purchases and that there was no "PlayFair" for video DRM I refused to give them another cent. Their video DRM is hideous and unacceptable. Imagine if FairPlay refused to let you burn them to CD. Well, THATS the kind of service you're paying for. $2 for 22 minutes of video that is crippled beyond all usefulness.
So make it a real service. Do some research. Use other people's research. Come up with genre playlists and let people subscribe to them. Find worthwhile podcasts and hire/pay people to make them daily/weekly and let people subscribe to them. Promote hot DJs at hot clubs by letting them come up with weekly playlists and let people subscribe to them. Build playlists from Billboard, Radio & Records, etc. and let people subscribe to them. And, of course, let "regular people" build lists of music and let people subscribe to them. Heck, build playlists based upon my ripped CDs and let me subscribe to them.
This is so right that I just want to scream at the morons in the music business for not getting a system like this set up. The really revolutionary part is that each user can manage sets of subscriptions on their own personal device and they are not limited by a fixed number of "channels" or any other holdovers from the radio days and since each user is paying the same subscriber fee there is more of an incentive to cater to all of the various niches out there since the real cost is in setting up and running the service, but once it is all set up and going there is almost no cost to add additional niche programs, eclectic playlists, and off-beat selections ala the Amazon.com com and Craigslist list based systems. The system would not even need to have only human DJs, it could use AI and have intelligent agent programs making playlists and selections based upon live user feedback, random, shuffle, etc...it is really wide open possibilities. The only explanation that I can think of is that the music execs are either too greedy, too stupid, or both to get this type of system up and running.
In the meantime you might want to check out Digitally Imported and A State of Trance w/Armin Van Buurenfor some of the features that I have described above.
The "Here's our whole catalog--you figure it out" model isn't bringing them in droves because it's too much work. I'm not going to pay $15 per month for access to a mind-numbingly large collection of music. But I might pay that much if the subscription service actually provides a service where I automatically get new music that I might actually want to listen to!
Yes, Yes, Yes! If there are any music industry people reading this then PAY ATTENTION...THIS IS WHAT WE WANT. Sigh, they just don't get it.
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.