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Gates: New Zune and New Strategies Against Apple

Thursday, October 4th, 2007 at 12:45 PM - by

Microsoft's Bill Gates has ambitious plans to take music customers away from Apple, according to the New York Times on Thursday. This is despite the fact that the Zune music player has just a few percent of the music player market and subscription music hasn't been a huge success.

Mr. Gates expressed bewilderment that the record industry had failed to turn digital music into a big moneymaker. Jeff Leeds reported that Microsoft has plans to change all that. First, Microsoft has taken pains to associate the Zune with the rising stars in music. Next, Microsoft will focus on selling music without DRM.

The final part of the strategy is to encourage music labels to work harder on promoting unlimited subscriptions. [Apple has always suggested that people want to own their music.]

“Subscriptions have absolutely been a mixed story and are not the mainstream thing today,” Mr. Gates said.

However, he thinks that will change in the future.

"People are going to listen to a lot more music because it’s going to be easy to find neat new exciting music, its going to be easy to have your music with you, in the car, when you’re running,” he said. “It seems like there ought to be a way to translate that into an opportunity."

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A guest said: (hide)

Thu Oct 04, 2007 1:03 pm

"[Apple has always suggested that people want to own their music.]"

ummm, that's because people DO want to own their own music.

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vasic said:

member since 09 Aug 2005 with 279 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 1:04 pm

After reading the New York Times article, all I can conclude is, iPod is safe and Apple has nothing to worry about. Gates and his team seem to just not get it. They continue to talk about subscriptions. They will expend enormous amount of effort (read: $$$) to shove it down consumers' throats. And they will fail, as consumers continue to click to buy $1 songs from iTunes (or Amazon).

Have fun and good luck, Microsoft, Gates and Zune!

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A guest said: (hide)

Thu Oct 04, 2007 1:04 pm

bet he is even more in "bewilderment" over why MSFT has been sitting at $ 30.- for the last half decade while APPL has been climbing

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A guest said: (hide)

Thu Oct 04, 2007 1:13 pm

"People are going to listen to a lot more music because it’s going to be easy to find neat new exciting music, its going to be easy to have your music with you, in the car, when you’re running,” he said. “It seems like there ought to be a way to translate that into an opportunity."

It's called a radio, and you're about 60 years too late.

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Engine Joe said:

member since 29 Jun 2004 with 413 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 1:49 pm

So, Billy, do you want to sell music without DRM or do you want subscriptions? Because those are mutually exclusive - you can't make one product that has both of these qualities (well, not as a practical matter, anyway).

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jimothy said:

member since 04 Jun 2004 with 612 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 1:49 pm

Guest wrote:
"People are going to listen to a lot more music because it’s going to be easy to find neat new exciting music, its going to be easy to have your music with you, in the car, when you’re running,” he said. “It seems like there ought to be a way to translate that into an opportunity."

It's called a radio, and you're about 60 years too late.

I realize it's fashionable to disagree with anything Mr. Gates says, but I think he's right, and I think your dismissal of portable music players because we've had radio for decades is naпve. With radio, you're not taking "your music" with you. You're taking the radio station's music with you (which really means, what the labels are promoting), along with all their ads, annoying DJs, etc.

What I believe Gates is saying, in not so many words, is "Dammit, music labels, why do you want to make it so damn hard for customers to play their music in a variety of places? Nobody's gonna pay twice to listen to the same song in their car and at home. If you make it easy for them to listen to music more often and in more places, they'll buy more music, and you'll make more money. Quit being so dense!"

It's kind of funny to hear Gates get on the no-DRM bandwagon, since they had appealed to the labels with more restrictive DRM than Apple's FairPlay, but it's still good news that he's finally seeing the light, even if he had to be forced to do so by Apple.

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A guest said: (hide)

Thu Oct 04, 2007 1:55 pm

Subscriptions don't work Bill! They cost to much too. I listen to a lot of music but I don't necessarily buy every month. So paying $15 a month when I don't purchase anything isn't cost effective. I don't like to be told I have to visit a site so I can keep what I already payed for too. And on top of that most subscriptions don't let you burn a CD or transfer your music onto a portable player without even more additional costs!

That's why they don't work and never will. You end up paying twice as much and if you miss a payment your music is GONE!!!

NO THANKS BILL!!

iTunes rules!

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A guest said: (hide)

Thu Oct 04, 2007 1:55 pm

the only reason M$is this is about subscriptions and media. They care not to sell media players, except as far as it allows them make reoccurring revenue off media forever, just as was their hope from DRM.

Microsoft is a failed company this decade, and without their monopoly in media payers or video game console arenas, they simply cant compete or innovate. Even with the most wildly successful console franchise, perhaps ever, Halo, they couldn't even bury the number 3 player in last generation of game consoles, nintendo, who now is top dog in sales this generation.

the fact is without Office, and government and corporate purchases of their software, Microsoft has nothing that the majority of consumers want for entertainment.

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A guest said: (hide)

Thu Oct 04, 2007 2:39 pm

When I was in my 20s and 30s, it was music, stereos and cars. I read the magazines, took time to look & listen.

Now I have 30GB of digital music. Don't have the time to read music, stereo or car mags and blogs.

And don't have the time for subscription music.

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Dirt Road said:

member since 24 Oct 2002 with 1239 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 3:43 pm

"Mr. Gates expressed bewilderment that the record industry had failed to turn digital music into a big moneymaker."

Both BillG and the record industry have the same mindset: feed the customers the same ol' crap and they'll buy it. It worked… right up to the time that alternatives became available. What BillG is actually saying is, "I don't understand why the record industry isn't more successful; they have the same business mindset as I do."

Both Microsoft and the RIAA members served a useful purpose at one time. Now they're both just in the way.

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ericmurphy said:

member since 01 Aug 2001 with 21 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 3:44 pm

How does the subscription model work without DRM? What is to prevent people from signing up for a subscription, downloading every song they can download for two months, and then canceling their subscription?

Is Microsoft planning on charging a few thousand a month for a subscription?

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 4:02 pm

jimothy wrote:

I realize it's fashionable to disagree with anything Mr. Gates says, but I think he's right, and I think your dismissal of portable music players because we've had radio for decades is naпve. With radio, you're not taking "your music" with you. You're taking the radio station's music with you (which really means, what the labels are promoting), along with all their ads, annoying DJs, etc.

What I believe Gates is saying, in not so many words, is "Dammit, music labels, why do you want to make it so damn hard for customers to play their music in a variety of places? Nobody's gonna pay twice to listen to the same song in their car and at home. If you make it easy for them to listen to music more often and in more places, they'll buy more music, and you'll make more money. Quit being so dense!"

It's kind of funny to hear Gates get on the no-DRM bandwagon, since they had appealed to the labels with more restrictive DRM than Apple's FairPlay, but it's still good news that he's finally seeing the light, even if he had to be forced to do so by Apple.

Who has to pay twice, Jimothy? I pay only once. If I buy a CD, I rip the songs I want into iTunes and load them on one of my iPods. (My 30 GB iPod 5.5G has all the music, some of the videos and podcasts; my 2 GB Nano has a couple of audiobooks, a few podcasts and a few dozen songs.) If I buy a song or album on the iTunes Store, I can play it in my car with the iPod (direct connection to the disc changer port), at home on my iMac or on my stereo with the iPod or through Airport Express, and anywhere else on an iPod. I back up everything I download (podcasts and purchased songs/videos/TV shows) to an external HD and, later, to data DVDs. DRM doesn't enter into the process at all. Once I get a HDTV, I'll also get an Apple TV, which is really an immobile iPod with a very large display.

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jimothy said:

member since 04 Jun 2004 with 612 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 4:22 pm

gslusher wrote:

Who has to pay twice, Jimothy? I pay only once. If I buy a CD, I rip the songs I want into iTunes and load them on one of my iPods. (My 30 GB iPod 5.5G has all the music, some of the videos and podcasts; my 2 GB Nano has a couple of audiobooks, a few podcasts and a few dozen songs.) If I buy a song or album on the iTunes Store, I can play it in my car with the iPod (direct connection to the disc changer port), at home on my iMac or on my stereo with the iPod or through Airport Express, and anywhere else on an iPod. I back up everything I download (podcasts and purchased songs/videos/TV shows) to an external HD and, later, to data DVDs. DRM doesn't enter into the process at all. Once I get a HDTV, I'll also get an Apple TV, which is really an immobile iPod with a very large display.

The record companies want you to pay (at least) twice; they don't want you doing what you're able to do now. They want to lock down CDs, so you can't rip them and listen to them on your computer or iPod. They want you to pay again to use a song as a ringtone. If you want to listen to a full song on your cell phone, that you buy over the provider's music store, they want you to pony up yet again. I'm not making this up; a major label exec said he thinks users should have to pay for each place they listen to music; pay once for the home, once for the car, etc.

My point (and, I believe, Mr. Gates') is that no sane customer is going to do this*. THAT'S why the the labels have "failed to turn digital music into a big moneymaker."

* Fortunately for the music biz, there's plenty of insane customers who do purchase ringtones.

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A guest said: (hide)

Thu Oct 04, 2007 4:56 pm

First, Microsoft has taken pains to associate the Zune with the rising stars in music.

Now this is scary. Look at Microsoft's track record with identifying rising trends in the computer market, and the music label's penchant for promoting dreck. Combine these two and I'm sure it will be a running joke that the best way to tell if an up-and-coming music star is going to flop is if they have a Zune on them during a performance.

Steve Ballmer, picking out which musicians microsoft will pimp. Coming soon, Brittney singing her cover of "Developers-Developers-Developers"

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macpro3000 said:

member since 01 Aug 2002 with 22 posts, unranked, send him a message or view his profile

Thu Oct 04, 2007 7:07 pm

Quote:

The record companies want you to pay (at least) twice; they don't want you doing what you're able to do now. They want to lock down CDs, so you can't rip them and listen to them on your computer or iPod. They want you to pay again to use a song as a ringtone. If you want to listen to a full song on your cell phone, that you buy over the provider's music store, they want you to pony up yet again. I'm not making this up; a major label exec said he thinks users should have to pay for each place they listen to music; pay once for the home, once for the car, etc.

So true. That is why in addition to my CDs and digital tracks I own, I still have most all of my DRM-free vinyl record collection that I can also rip and burn to my computer, CDs and iPod.

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A guest said: (hide)

Fri Oct 05, 2007 4:58 am

At least Bill is honest - he just doesn't get it. Probably never will!

I'm not getting burnt like two of my friends will subscription "investment" in music that just disappears in a puff of smoke when they changes name/pheonix/go broke.

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JulesLt said:

member since 06 Jul 2005 with 136 posts, unranked, send him a message or view his profile

Fri Oct 05, 2007 8:00 am

The problem for Gates is that MS basically see themselves as the 'natural' definer of what should be a standard, but when it comes to digital media, they are up against a lot of companies already in that space that are used to creating open standards (the CD format, DVD forum, MPEG).

So what's MS real interest in this space? They could have backed H264 / MP3 / AAC and simply applied proprietary DRM around it, but they don't want to be a DRM provider only, so they're using their abilities with DRM to try and push companies towards their codecs also.

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A guest said: (hide)

Fri Oct 05, 2007 12:52 pm

Everybody has different tastes when it comes to music. Personally, I listen to radio, whenever I can find a non-commercial station, to get turned onto new music. I have dozens of CDs that I have probably played 2 or 3 times, never to be played again. So a subscription service works for me. When I hear a musician or style that is new to me, I can download or stream every album by that person I can find. Maybe I like it and listen to it a lot, maybe I only listen once. If I really enjoy it, I go on Amazon and find a used CD. (I have never bought a single download of any flavor and don't anticipate I will) So while you may enjoy listening to the same music over and over again, I don't. I have tried several subsription services over the past few years and enjoy the idea but am still suffering through buggy software. Whoever gets the best interface going, beit Napster, Rhapsody, or Apple...they will get my business. And unlike buying downloads in some proprietary format that locks me into a player, I can switch overnight, because all the music, the whole library, is available to me instantly. I am curious, why are the majority of you people so threatened by this? Because Steve hasn't said it is OK? Just because your listening style doesn't fit the product, don't discount the rest of us who want something different.

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A guest said: (hide)

Fri Oct 05, 2007 8:11 pm

The problem with subscription services is not the subscription part, there are many things that people pay on a subscription basis. The problem is the service part, what do these services provide other than a catalog of songs? Is there good curation? selections based on theme? linkage between similar content? objective attributes?

No. It is not a much of a service.

that's why it won't work for me.

the best thing that has come along recently has been Pandora Radio (which i can't get now, cuz I don't have a US I.P. address)

Its not like owning a recording of music and using a subscription service are even opposites, they can play well together.

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A guest said: (hide)

Sat Oct 06, 2007 4:11 pm

Guest wrote:
"[Apple has always suggested that people want to own their music.]"

ummm, that's because people DO want to own their own music.

keyword being suggested, not allowed.

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