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With Scoble leaving, Gates turning his attention to his foundation, Vista dragging its way to market and the Xbox 360 trailing the PS2 in sales you'd think Microsoft would take a step back, collect itself and try to get its house in order. According to this story from Reuters, it'll do nothing of the sort. Citing sources "familiar with the plans," Reuters is reporting that Microsoft is planning a portable audio/video device and Web-based service to take on the iPod and iTunes.
The story goes on to say that Microsoft aims to create a community with its e-commerce site, whereas iTunes is a shop-and-go destination, no e-loitering allowed (or at least it isn't encouraged.) Reuters also refers to a plan Amazon.com has to offer a player/music store combination. Amazon's business plan may follow the cellular phone model and offer the player for free, or at a reduced cost. This type of plan recognizes that the true value is selling content for the device. This is a path I've talked about for Apple as being a really shrewd move.
Whenever Microsoft enters a new arena you obviously have to take notice, and this case is no different. Let's leave music alone for a minute, because I think the iPod has an almost unshakable stranglehold on the digital music market. The key to this move for Microsoft would be video. If you take a look at my reviews of current VOD (video on demand) offerings from both networks and movie studios you'll see a theme emerge. MovieLink and CinemaNow, the flawed, darling Internet distribution centers for Hollywood, all come with Microsoft DRM. One big drawback of these services is that the downloaded files can't be viewed on iPods, PSPs or any other portable device. A portable device from Microsoft would remove this hurdle.
If Microsoft's PR machine can convince Hollywood that its DRM is better than Apple's and steer the networks and studios to its own online store it may just have a chance. After all, every Windows-enabled PC comes with a Windows Media Player already installed, and I'm sure there will be a link to Microsoft's music/video store from the default homepage on every copy of Internet Explorer. Maybe Microsoft can leverage its Windows dominance into another coup. I wonder if there's a group of engineers locked in a room somewhere in Redmond, Wash. right now examining every last detail of the iTunes/iPod interface trying to find a way to steal improve upon their innovations. It sure wouldn't surprise me. — Brian Ward
Technorati tags: microsoft, ipod, music.
I found your Microsoft music service post an interesting one. However, I think the mention of the 360 sales lagging PS2 sales as being unnecessary. Despite the contention of the folks at Ars Technica, comparing the 360 to the PS2 is like comparing steak to hamburger. Sure, both steak and hamburger are beef, but steak is a higher quality meat and therefore costs more. The 360 is exactly the same.
At any rate, the 360 does offer a model for any nascent music/movie service in the form of Xbox’s Live service. A key feature that sets the 360 apart from prior consoles is its online marketplace where gamers can buy simple arcade games like Pac-Man and Gauntlet, and view movie trailers. While Microsoft expected these features to be popular, most of their executives have admitted they didn’t expect it to be as popular as it is. The success of the 360’s next-generation Xbox Live service has probably wetted their appetite for another pay-for content service.