October 10, 2004
../ Micro Soft Launch
Microsoft has quietly launched its new Download Music store on MSN without the multimedia fanfare that usually accompanies such debuts. MSN Music states that it has
one million tracks for download and will sell album only downloads from such artists as Madonna, Radiohead and Metallica, something Apple's iTunes has refused to do.
First the Facts: MSN Music has the same pricing structure as industry leader iTunes, 99 cents for a download and $9.99 for most albums. Personal usage rights are also
similar, song library transfers to five computers, seven burns per playlist, and an unlimited number of portable devices can be supported by one library.
MSN Music will support over seventy different MP3 players that support Windows Music Audio, but not the iPod. The iPod has over 50% of the portable digital music player
market and iTunes has a dominating 70% of the digital download market. However, Microsoft's Windows operating system is on 95% of personal computers which all have a
copy of Windows Media Player already installed. And this is exactly how Microsoft will slowly strangle its competition.
Now the Strategy: Instead of using MSN Music as a loss-leader for a portable music player like Apple does with iTunes and the iPod, Microsoft will use its MSN Music
site as a persuasive argument for customers to utilize the latest Windows Media Player technology. Again, Microsoft wants to "own" the online music store operating
system and license the technology to the many online music stores. This strategy is revealed by the simple fact that the new version of Microsoft's Window's Media
Player (WMP) will allow users to purchase from several different online stores including WalMart, MusicNow, Napster and Yahoo's MusicMatch, from inside the single
The new version of the Windows Media Player will also feature the Janus digital-rights-management technology that will enable online stores to offer portable subscription
services. (see Napster A-Go-Go story above) Microsoft is banking on these new features to chop the mighty iTunes tree down over the coming year.
So why not come out with a splashy advertising campaign to signal the launch of MSN Music? Microsoft can certainly afford it. Well it makes sense if you look at MSN
Music as an advertising vehicle for the Windows Media platform. Why advertise the advertisement?
The Future: Microsoft plays full contact ball and has a long history of making its competitors look sissy real fast. They know that the iPod can only be a media
darling for so long, especially with portable video just around the corner. Microsoft is focusing all its engineering muscle on making Windows Media the multimedia
operation system of choice. And with a plethora of manufacturers coming out with audio/video gadgets that run on Microsoft's Windows Media based Portable Media Center,
they're once again, ready to deliver Apple, the death blow.
>>> Digihear? October 2004
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Digihear? Stories: September 2004
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