Microsoft Lobs Out Latest Red Herring: $30,000 to Fill an iPod

[Vincent Ferrari]

<div class='os_post_top_link'><a href='http://arstechnica.com/microsoft/news/2009/05/microsofts-next-apple-price-attack-zune-pass-vs-itunes.ars' target='_blank'>http://arstechnica.com/microsoft/ne...s-vs-itunes.ars</a><br /><br /></div><p><em>"Microsoft has put Wes Moss, Certified Financial Planner, to work in telling everyone why the Zune Pass makes more sense than purchases from the iTunes store."</em></p><p><em> <object classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" width="423" height="256" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0"><param name="src" value="http://www.youtube.com/v/N_ExogURaeI" /><embed type="application/x-shockwave-flash" width="423" height="256" src="http://www.youtube.com/v/N_ExogURaeI"></embed></object></em></p><p>Yep...&nbsp; Keep pimping those recurring bills in the down economy, Microsoft.&nbsp; I'm sure lots of people are looking to shell out another $15 a month for something they can't own.&nbsp; I don't know why I'm even bothering addressing this, though.&nbsp; Lots of defunct or little-used services have tried the rental model over the past few years and none of them have really caught on with customers.&nbsp; While I do think they have their place (please, spare me the crap in the comments; I'm really not interested in yet another lecture on why renting your music is such a great engine for discovery of blah blah blah), a vast majority of people want to actually own their music as evidenced by the fact that none of the rental services has been more than a niche blip on the MP3 market.</p><p>Oh yeah; did I mention that you're pretty much locked in to a Zune or Windows-based PC when you rent your music for $15 a month?</p><p>How quaint.</p>

[jdmichal]

Honestly, this post smells like troll flamebait to me. Abrasively state your viewpoint on a topic, then immediately dismiss an argument of the opposing viewpoint.

As is often said, it takes all types. I have yet to see what the problem is with Microsoft offering the Zune Pass as an alternative. If that's not one's cup of tea, the normal process of buying music is still present.

As it is right now, the 10 permanent song downloads included with the Pass, valuing at roughly $10, drops the cost to roughly $5 a month, assuming you would have downloaded at least 10 songs during that time period anyway. So it's quite possible to gradually replace music downloaded with the Pass into owned music at no extra cost. And it also opens up the idea of channels, which I think are great and would be very costly to the user if implemented under any other system.

So there, and I didn't even use the music discovery argument, which is also still valid, even if brashly dismissed by you.

[Vincent Ferrari]

Honestly, this post smells like troll flamebait to me. Abrasively state your viewpoint on a topic, then immediately dismiss an argument of the opposing viewpoint.

As is often said, it takes all types. I have yet to see what the problem is with Microsoft offering the Zune Pass as an alternative. If that's not one's cup of tea, the normal process of buying music is still present.

And honestly, your reply, as usual, puts words in my mouth while criticizing me for those words.

I didn't say there was a "problem" with MS offering subscriptions and even said they have their place. It's my opinion they are a bad idea in general and that consumers agree seeing as none of them have ever "caught on." If you put it in the context of these stupid ads, Apple is destroying Microsoft with a device that, in their words, costs thousands of dollars more to fill up with music.

Speaks volumes about subscriptions if you ask me.

As for whether or not I'm abrasive, well that's just fine. I'll just say if you want wishy washy touchy feely be nice BS, you ain't gonna find it here.

Sorry.

[Janak Parekh]

The biggest problem is that Microsoft and its predecessors still don't know how to sell subscription music models. Thinking of it as "pay $15 and carry any music you want" is the wrong way, because then consumers worry about ownership.

Rather, think of it as "your own customized radio station, that you can carry in your pocket", and suddenly it sounds cool and useful. That's why I have Rhapsody (albeit without the pocket-carrying, because I carry an iPhone).

--janak

[doogald]

I repeat this completely with tongue in cheek, as I really have no problem with the Zune (and would love it if they created a desktop client that actually ran on OSX), but, as somebody else said elsewhere, the Zune is so lame that it cannot sell better than an iPod that costs $29,985 more.

;)

[emuelle1]

Microsoft's reasoning seems to assume that everybody with an iPod does nothing with that iPod but listen to music purchased from the iTunes store. I've never believed Microsoft had a good grasp of digital media. Windows Media Player still can't handle podcasting, which is what I've primarily used my iPod/Touch/iPhone for. Music is more of an afterthought in my case.

When I first started getting into downloading podcasts, if only WMP could have handled them and synced them with the Windows Mobile devices I used to use, I might have stuck with them. iTunes handles podcasts and library syncing (yes, only with Apple products) well enough that I went with that platform.

[Macguy59]

Cue Jason's cable TV analogy ;) They always leave out the fact that once you stop paying the $15 their errr your music vanishes.

[baralong]

Microsoft's reasoning seems to assume that everybody with an iPod does nothing with that iPod but listen to music purchased from the iTunes store. I've never believed Microsoft had a good grasp of digital media. Windows Media Player still can't handle podcasting, which is what I've primarily used my iPod/Touch/iPhone for. Music is more of an afterthought in my case.

When I first started getting into downloading podcasts, if only WMP could have handled them and synced them with the Windows Mobile devices I used to use, I might have stuck with them. iTunes handles podcasts and library syncing (yes, only with Apple products) well enough that I went with that platform.

I have to agree. I've got a 16GB iPhone and most of the space is filled up with podcasts. Previously I'd had windows mobile phones and I really hated iTunes (still not a big fan of it for music organization) but when I started downloading the pod casts I realized they had the process in the bag.

I'm still surprised that the latest version of WMP doesn't do it.

I listen to more podcasts than music and so a subscription service wouldn't cut it.

[Jason Dunn]

It's my opinion they are a bad idea in general and that consumers agree seeing as none of them have ever "caught on."

They haven't "caught on" because they can't exist in a vacuum - they need to go hand in hand with the hardware, and the iPod has that market more or less locked up. Virtually impossible for any player to break into it, now or a few years back. If and when Apple offers a music subscription service, I think it will be a huge success and they'll see big numbers of people move toward it.

[Vincent Ferrari]

They haven't "caught on" because they can't exist in a vacuum - they need to go hand in hand with the hardware, and the iPod has that market more or less locked up. Virtually impossible for any player to break into it, now or a few years back. If and when Apple offers a music subscription service, I think it will be a huge success and they'll see big numbers of people move toward it.

I think initially you'd be right. If Apple launched subs, it would be giant at the beginning, but once the novelty wears off it would be a flat plain of mediocrity. I just don't see a mass market appeal for paying a monthly fee to keep music on your music player. Do they have their place? Sure, but that place isn't mass market. If it were, there are plenty of devices that supported the Plays for Sure DRM that should've soared. The hardware wasn't that poor compared to the iPod. If people wanted subs, they would've bought any device they could get them on.

[Macguy59]

If and when Apple offers a music subscription service, I think it will be a huge success and they'll see big numbers of people move toward it.

I'm not buying that (or should I say renting that ?). The mp3 player market is pretty much saturated from Apple's point of view. Most of the iPods continued success comes from the sale of new models that existing customers seem to want. Looking at craigslist it appears that Apple is gaining some Zune (and other players) users but I suspect it's an extremely small percentage. Speculation on my part but I suspect the average music subscriber would rather have a root canal done than to buy an Apple product.

[Jason Dunn]

If it were, there are plenty of devices that supported the Plays for Sure DRM that should've soared. The hardware wasn't that poor compared to the iPod. If people wanted subs, they would've bought any device they could get them on.

I can't believe I'm saying this, but I don't think you're giving Apple enough credit with the iPod. :)

The reason the iPod has been so successful, in my opinion is the combination of hardware and software that they simply "got right" far better than anyone else. Sure, you had early players like the Rio Karma with great hardware, but the software experience? Pretty ugly. iTunes + iPod was a massively better sync/user experience than PlaysForSure MP3 Player + Windows Media Player.

That's the biggest reason why Microsoft came out with the Zune - only tight integration of both hardware and software would allow them to compete with what the iPod offers. And, despite all the mockery in this forum of the Zune, it really is a great user sync experience. Most people that have spent time with both pieces of software say that the Zune desktop software is better than iTunes. I know for me it is (speaking as an iPod Touch and Zune owner).

Subscription music is a tough sell because most people don't understand it - and they can't really appreciate it until they try it...and because we live in an iPod world, they can't try it. It will remain a "quirky" option for consuming music until either the iPod is replaced by something else in the market, or Apple offers a subscription music plan.

[Sven Johannsen]

Rather, think of it as "your own customized radio station, that you can carry in your pocket", and suddenly it sounds cool and useful. That's why I have Rhapsody (albeit without the pocket-carrying, because I carry an iPhone).

--janak
Hmm, I like that. Folks don't seem to have a big problem shelling out for Satellite radio, and you don't get to keep anything there, or have that much control over what you hear, save channels that are dedicated to genres, etc. Now if we could get Zune Pass support on a WM phone, to get 'anywhere' access....Hmmm

[Macguy59]

Folks don't seem to have a big problem shelling out for Satellite radio,

Not quite as XM/Sirius is going bankrupt

[Janak Parekh]

Not quite as XM/Sirius is going bankrupt Not an apt cost comparison, though. The physical infrastructure for satellite is massive, much bigger than a subscription music service. The number of subscribers you need to break even is much smaller (though nonzero, so some sane marketing would certainly help).

--janak

[Vincent Ferrari]

Not quite as XM/Sirius is going bankrupt

1. They won't be going bankrupt any time soon. I'm a shareholder and if they were I'd sell immediately. With the debt relief loan they got from Liberty Media, they'll be good for a few years while they restructure (which they have been doing since the DOJ approved the merger). The merger created a ton of debt because of XM's poor financial performance AND the expenses of running a private Satellite network (as Janak correctly noted).

2. They have about 3.2 million subscribers. I'd hardly call that "no interest." That means 1% of Americans have paid radios from SiriusXM. Nothing to shake a stick at.

[Sven Johannsen]

They have about 3.2 million subscribers. I'd hardly call that "no interest." That means 1% of Americans have paid radios from SiriusXM. Nothing to shake a stick at.
See, that's what I'm thinking. How much different is satellite radio than subscription music. At least as far as what you get to keep. It's transient entertainment. People pay for Cable, Netflix, via subscription.

[Janak Parekh]

See, that's what I'm thinking. How much different is satellite radio than subscription music. At least as far as what you get to keep. It's transient entertainment. People pay for Cable, Netflix, via subscription. Exactly. The problem is that, amongst all of the stuff you mentioned, only subscription music is targeted differently (as a "competitor to music you'd purchase").

Well, the other dynamic is that, in general, people value music ownership more highly than video ownership; most people are not the type to repeatedly watch the same episodes/movies. However, the fact that satellite can attract users should suggest that there is at least some possibility of music subscription succeeding along similar lines.

--janak

[a_bLAK_BOy_t]

I'm sure lots of people are looking to shell out another $15 a month for something they can't own. I don't know why I'm even bothering addressing this, though.

Thank you so much. ive paid already, so why does my music have to expire after one month? but either way, thats cheap for some quality music. Limewire pisses me off more than the Zune Pass does. either way, both of them have cons.