Microsoft has spent five years telling hardware partners to build music players around its PlaysForSure system, and this month it launched a music player that does not support PlaysForSure. If you want to understand why the Zune is going to struggle, start there rather than with the brown one.
The hardware is fine. Genuinely fine, which is a low bar and Microsoft clears it. Thirty gigabytes, a three inch screen that is larger and better than the equivalent iPod’s, an FM radio that Apple has stubbornly refused to include for years. Two hundred and forty nine dollars puts it exactly alongside the machine it is trying to displace. Nobody buying this is going to feel cheated by the object.
The Wi-Fi is the differentiator and it is also the clearest illustration of the problem. You can send a song to another Zune wirelessly. The recipient may then play it three times, within three days, after which it stops working, and this restriction applies even to music the sender recorded themselves. A band cannot hand out their own track without it expiring. Microsoft built the one feature no competitor had, and then negotiated it into something almost nobody will use twice.
That is not an engineering decision, it is a licensing one, and it points at the actual dynamic here. To get the catalogue, Microsoft agreed to pay Universal a royalty on every device sold, not on every song. A cut of the hardware. No music company has ever extracted that from Apple. Microsoft arrived late enough that the labels could name a price, and the price shows up in the product as a feature that half works.
The abandoned partners are the part I find genuinely difficult to defend. Creative, iRiver, Samsung and others built players around Microsoft’s format on the understanding that a shared standard would give them collective scale against the iPod. Microsoft has now competed with them directly using an incompatible system, which means the customers who trusted that ecosystem own libraries the new flagship cannot read. Whatever the strategic logic, the message to anyone considering a Microsoft platform commitment is not a good one.
Then there is the store, which prices things in points rather than money, so a purchase requires converting dollars into an intermediate currency you must buy in blocks. Anybody who has bought points knows they exist to leave a residue you cannot spend. It is a mechanism for holding onto small amounts of other people’s money, and it will annoy every single customer who notices.
The strategic question underneath all this is whether Microsoft can win a market where it is arriving five years late against a product that has roughly three quarters of it. Apple did not win with hardware. Apple won by making the buying and syncing of music something you did not have to think about, and by then selling seventy million devices into that habit. Zune has to be enormously better to break the habit and it is at best equivalent.
My honest read is that this is a first product rather than a serious attempt, and Microsoft has the patience and the balance sheet to iterate for years, which it will need to. The version worth judging is the third one. This one exists to establish that Microsoft is in the category, to get retail shelf space, and to stop the conversation where the iPod is the only option.
What I cannot get past is the sharing restriction. It is the single reason to buy this over an iPod, and somebody in a negotiation traded it away for a catalogue. That is the whole story of Microsoft in consumer media, repeated once more.