3 Comments

Summary:

Microsoft (NSDQ: MSFT) is hoping to add original and exclusive content to Zune, in an attempt to get some traction in the portable media pla…

imageMicrosoft (NSDQ: MSFT) is hoping to add original and exclusive content to Zune, in an attempt to get some traction in the portable media player market, and make a dent, if any, in iPod’s dominance. Andrew reports that MSFT execs have been making the round of talent agencies and production companies here in Hollywood, trying to drum up these content deals. Zune, which recently announced crossing the 2 million players mark, does have some TV content. But it is hoping to add Zune “nontraditional programming” that can capitalize on the device’s social networking platform, according to Richard Winn, director of entertainment development at Zune, quoted in the story. So it is still trying to hawk its Zune Social startegy, when the numbers–to enable network effect–aren’t in its favor.

And while that’s an admirable pursuit, it won’t move the needle. Exclusive content deals do generate PR, but no proof yet on it having a big impact on sales, XM-Sirius (NSDQ: SIRI) notwithstanding (well, in the latter case, you spend crazy money to get these rights, and merge in an effort to survive with those costs).

Meanwhile, an ironically funny story in tomorrow Sunday NYT magazine, about the kind of people who buy Zune. “The most salient feature of the Zune seems to be that it

You’re subscribed! If you like, you can update your settings

  1. jim McDermott Sunday, August 10, 2008

    this is pretty hilarious – they finally figured out that unique content might be a good idea? i interviewed with the Zune people in 2006, and when we discussed how they could compete with the iPod, i said two things:

    1) integrate deeply with the XBox 360, include a music store on 360 Live, make sure to brand the device as a 360 peripheral, as 360 is perhaps the only product Microsoft makes that consumers feel universally positive about;

    2) Work closely with the labels to create exclusive content, and use existing properties with millions of eyeballs like msn and the 360 portal to promote said content.

    At the time, the labels were desperate to enable competition to iTunes, so Apple would not have total market domination. The combination of a cool videogame platform, with a store as part of the ecosystem, plus a network of sites to promote the offerings, seemed like a sound strategy to pursue.

    Instead, the Zune people launched the bizarre "Welcome to the Social" campaign, which was like a bad French Surrealist cartoon created by people who smoke very strong weed. And since launch, there has been zero synergy between Zune and 360.

    None of the people I met at Zune had any experience with or affinity for music, or portable devices. Or video games. It was absolutely no surprise that the Zune didn't unseat the iPod; but it continues to be a surprise that Microsoft hasn't pursued the most obvious and easy strategy to jump start this product.

    You don't need to go to "talent agencies" and "production companies" to obtain unique entertainment content – you need people who understand the art, who have relationships, who can offer artists, artist managers or labels a value proposition that is obvious. It would be absolutely simple for Microsoft to get this done, if only they'd hire some people who actually had experience or ability in this area.

    It's not like they don't have the money to do so, so one wonders why it is taking them years to get their act together.

  2. Jim, The Xbox and Zune technology/content relationship is a big priority to us here on the Zune content team. I have recently done video content partnerships with Xbox, MSN and Soapbox that has created opportunities at Comic-Con 2008, Podcasts and the Olympics. We also have a strong and growing effort around video podcasts that are doing very well on the Zune. Podcasts offer a vast content selection from all types of content providers large and small.

    The other thing you are misunderstanding is that Zune does have a strong music programming team that IS DOING exactly the things you are saying we are not doing. You are also wrong on the experience area as Zune has outstanding talent and experienced people to drive original video and music content with labels/artists. It is happeing every day all over the country.

    You do actually need to talk with everyone at all levels in the entertainment industry to get things done and Zune is doing it. I am doing it every day and I know the other people who are doing it. Zune is a new brand and product, it needs to be given a fair chance. Many great people are putting in outstanding efforts to build this Zune brand and software experience. It is only a little over two years old and our competition has a huge headstart. I believe we are making great headway and look for more from us soon.

    Rob Greenlee
    Zune Podcast & Video Programming Lead
    rob at zune.net

  3. jim McDermott Monday, August 11, 2008

    Rob;

    I appreciate your enthusiasm and of course I have no real idea what the Zune team is doing on a granular level every day. That said….

    My comments, in regard to this story, are based on a few things:

    1) my limited personal experience early on as an interview candidate prior to Zune's launch.

    2) comments from many of my friends and colleagues in the music industry, in regards to Zune's historical and ongoing efforts to develop exclusive content, relative to Apple and others in the space. "Strong" is not a word I have heard used by any label people when describing Zune's music programming efforts.

    3) my perceptions as both a consumer, and an experienced media professional, when I look at what Zune currently offers.

    2 years is quite a lot of time for a "fair chance" in this business. There are a long list of compelling digital music offerings, with varying models, that have made headway with consumers in that time. Zune however has lost retail distribution, your marketing visibility is marginal at best, and frankly, there are very few people in the industry that take either the device or the store very seriously. Zune is very rarely an element in the marketing plan of any artist release, unlike iTunes, or Rhapsody, eMusic, or Napster.

    The industry does, however, continue to be compelled by Xbox Live, and the 360 platform, along with consumers. Why there has not been an increased level of integration between the two devices/services is extremely curious; of course it's simple for me to comment on this, not having to sort thru the political intrigues at Microsoft which might enable such an integration.

    Many of my friends in the music industry share the opinion that this missed opportunity of synergy between Zune and 360 is a strategic blunder. In fact, there have been whispers as of late that Sony may perhaps rethink the PS3 as a potential music distribution platform.

    Honestly, I have zero idea what you guys are doing in Podcasting and video, so again, my comments are in response to the posted article, specific to music.

Comments have been disabled for this post