Is Microsoft Set to Abandon its Top-Down Zune Approach?

By  |  Sunday, March 29, 2009 at 10:30 pm

Zune LogoThat could be true, if what we’re hearing about the buzz within Microsoft these days is correct. The Zune for all intents and purposes has been anything but a success for Microsoft. Redmond saw that Apple was wildly successful in controlling the experience from the top down, and decided to try to duplicate it.

In the process it all but abandoned its partners, casting PlaysForSure aside in favor of its own single store proprietary system a la Apple’s. The change all but meant certain death for just about every store that wasn’t either the Zune MarketPlace or iTunes, and most device manufacturers.

Fast forward to today. We’re now nearly three years out from Microsoft’s initial launch, and the company has very little to show for it. iPods still outsell Zunes by a 20-to-1 (or more) margin, roughly the same as it was at launch.

So what is Microsoft to do? According to our sources, the company is currently discussing marketing strategies going forward. But the most interesting aspect of this talk is that Redmond is apparently sharing information with key partners for the first time in the platform’s short history.

This would mark a definite change in strategy, and possibly indicates that Microsoft is finally admitting that the Zune platform in its current form is not working, and certainly not sustainable from a profitability aspect.

What information is being shared is not clear. But considering the time for refresh has typically been in the late summer-early fall time frame, if Microsoft is indeed going back to its partners, now would be the time to start talking.

Another possibility is that Microsoft may be pushing around an iPod+HP-like setup, although I would venture to guess manufacturers would likely be given more leeway in control over the product rather than just slapping their own logo on the thing.

My advice to Microsoft is to make nice with the partners you for all intents and purposes screwed over when you made the switch to Zune. You tried to go it alone, but it didn’t work. If you want to stay serious about the music device business, you need their help.

After all, the door is all but closing, and the iPod’s dominance shows no signs of fading. Anything but has become merely an imitator. If Microsoft doesn’t figure this out soon, it may find itself chasing a wild goose.

 
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14 Comments For This Post

  1. ACE Says:
    March 30th, 2009 at 3:14 am

    This story, while good, had anything but a minimal amount of the phrase “anything (or all) but” which seems to be in all but none of the paragraphs. That would make this story anything but readable..

  2. Kontra Says:
    March 30th, 2009 at 3:35 am

    You realize the horse, the ship and the train all left several years ago? For good. Take the fork please. We explain here:

    Consumer markets: Time for Microsoft to exit?
    http://counternotions.com/2007/10/12/microsoft-vs-consumers/

  3. pond Says:
    March 30th, 2009 at 5:03 am

    It amazes me that MSFT won’t admit defeat here. And yet what do they hope to gain? The music labels have permitted drm-free mp3 tracks to go out; Amazon is thus the iTune Store’s biggest competitor. But all the PMP’s play mp3, so that means there’s no point in a Zune or Zune platform with DRM and WMA.

    MSFT might have a chance at video, which is what they ought to be looking at; but the Zune isn’t great at that. No tiny device will be. And the MPAA and friends are looking more and more like they want to be vertically integrated in this platform, and own Hulu or whatever other online location to watch movies or TV shows.

    Building in great video support for netbooks in Win7 is about the only play that makes sense for MSFT here. But that has nothing to do with Zune.

    Is this just stubbornness? Does MSFT have any hope of gaining anything out of Zune?

    Here’s another thought: Win Mobile 7, based probably on Win7, could give a good song/video support for smartphones. Here too MSFT is going to be awfully late to the party that in some ways they invented; 2010 is a long way off, and Android is coming on.

    So could the new iteration of Zune just be a place-holder to try to maintain some market share and momentum while we all wait to see what WinMobile 7 is?

  4. Sal Romano Says:
    March 30th, 2009 at 5:15 am

    I was on a plane back from Atlantic City yesterday. Looking across my row of seats I saw iPod, Mini Player, Zune 120, Creative Mini.

    I think a lot of people have grown weary of Apple and the ipod.

  5. Robert Says:
    March 30th, 2009 at 6:10 am

    Sal may be on to something. As I am looking to make a separation from the iPod Touch. I don’t like Apple’s image anymore. I have a couple of other friends who are in the market for mp3 players and are considering other options besides the iPod.

  6. HT Says:
    March 30th, 2009 at 8:59 am

    The one thing you can be sure of is that changing course every few years will eventually completely alienate all of your customers! Microsoft is the expert at this. I have several Windows Media devices that no longer work with Windows Media Player but even my oldest iPod still works just fine with iTunes and the iTunes store.

    So what’s the follow up to Plays-for-sure going to be this time? “Plays-for-sure-really-honestly-this-time”.

  7. sfmitch Says:
    March 30th, 2009 at 9:15 am

    @Robert

    You don’t like their image? Huh?

    So, you don’t decide who makes the best product or offers the best value or has the features that you want but you are going to base your buying decision on the manufacturer’s image?

    That’s crazy. But if it works for you, good luck.

    Just wondering, which Company has the right image, for you, in the MP3 market?

  8. therestrainingorder Says:
    March 30th, 2009 at 6:27 pm

    I feel so damned sorry for the Zune. Technically, it’s the better mp3 player. Sound quality wise? It’s the better mp3 player. It’s the better video player. It’s more customizable, and it has better features.

    Just not enough shiny sheen on it, I guess, or enough commercializing and market whoring. It’s a damned shame.

  9. madBOX20 Says:
    March 30th, 2009 at 6:56 pm

    i love my zune. its the first gen 30g but its great (well it was till i dropped it) and im a mac guy. my problem is my wife’s PC crash and all i have now is my imac and microsoft wont make their software for macs. its really frustrating too. i really would like to upgrade to a new gen zune but microsoft if FORCING me to look to an ipod just because “lack of options”

  10. Joe Says:
    March 31st, 2009 at 4:49 am

    I own a Zune. The iPod has two major advantages (besides branding).

    The first advantage, in one word, accessories. Every manufacturer that has anything to do with audio, from Bose to JVC to Taiwan Charlie’s, has some sort of device with an iPod dock. Outside of a JVC speaker dock I’ve seen, all of the Zune accessories are Microsoft. And, come on, $30 for a wall charger that doesn’t even include an extra sync cable? Um, for $10, I can get the same thing with a mini USB cable AND a car charger included.

    The second advantage is the pricing structure on iTunes. I’ve never used iTunes but, the way I perceive it, I could pick, say, 3 songs and Apple would charge my credit card $3.97 for those three clearly labeled $0.99 songs. The Zune marketplace makes you pre-pay a chunk of money that you may or may not use and the pricing structure is in ‘points’ that don’t correlate to how much money you pre-pay (how hard would it be to say $10.00 is 1,000 points or, here’s a thought, get rid of the points altogether). To top it off, the way the points are assigned it is almost mathematically impossible to spend down to zero. You always have a remaining balance that is not enough to purchase another track. Really, how much money corresponds to 79 points? Is it 99 cents? Is it $1.29? Is it $375.00? I don’t know but I don’t really want to fork over $10 or $15 for an account just for the privilege of buying one track that I have no idea how much I am actually spending to get.

  11. anonymous Says:
    March 31st, 2009 at 7:31 am

    This is unfair to those went with the Zune. The Zune hardware has potential but MS chose not to make it extremely full-featured, there are bits and pieces lacking in the Zune 3.0 hardware, and MS’s marketing sucks, they don’t advertise enough. PlaysforSure players weren’t bad either – Creative Zen, iRiver, Rio almost got it, and other players like Cowon A3 top the iPod Classic, save for the accessory market.

  12. bob Says:
    April 3rd, 2009 at 12:36 pm

    I am the proud owner of a Zune 120, coming from a Creative Zen. There’s one simple reason I have never gone with ipod: Steve Jobs idiotic stance against renting music.

    I have used Napster (the legal version), Yahoo! Music and now the Zune Marketplace. I have downloaded over 15,000 individual songs with each service. What idiot would pay $15,000 for music? I’ve paid about $720 over the last 4 years for my music. In 79 YEARS, if I never download another song, I’ll be losing money on the deal.

  13. david Says:
    April 6th, 2009 at 9:43 am

    the Zune brand is dead, and I cringe whenever I see those 4 letters. I have a sense that Windows Mobile 7 will be compelling, I hope they don’t pollute it with Zune branding. They should simply sell DRM-free downloads in a music section in the upcoming Windows Marketplace for Mobile. That plus a strong LG partnership should be a compelling force vs iPhone.

    My money is still on iPhone, but LG+Windows Mobile 7 could really challenge my loyalty lol.

  14. seth Says:
    August 28th, 2009 at 5:25 pm

    maybe M$ should make an mp3 player that actually works with their software and operating system. you would think that two products from the same company would be compatible, but that seems to be just wishful thinking.

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