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Summary:

Mary Jo Foley reports on her ZDnet blog that Microsoft is seriously considering making Zune services, such as the subscription-based Zune Pass, available to other platforms — and that includes Apple’s very own Mac OS X. It’s early days though, as Foley admits, “There’s no guarantee […]

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Mary Jo Foley reports on her ZDnet blog that Microsoft is seriously considering making Zune services, such as the subscription-based Zune Pass, available to other platforms — and that includes Apple’s very own Mac OS X.

It’s early days though, as Foley admits, “There’s no guarantee that the Redmondians will end up doing this — or timetable as to when this could happen — but it’s one of many strategies under active consideration.”

She adds, “I’ve been thinking that there might be a number of Apple iPod/iPhone users who might prefer a music subscription service over a pay-per-song one. (And one that’s better than Rhapsody.)”

Jose Pinero, Director of Communications for Microsoft’s TV, Video and Music Business told Foley that:

“…with the addition of the ability to stream music from a browser that is part of the new Zune 4.0 experience, Mac and Linux users already can stream music to their systems if they have a Zune Pass subscription. The streaming capability isn’t limited to Internet Explorer; it works with any browser.”

So does this mean we may see a Mac OS version of Microsoft Zune Player software appearing one day soon? The latest version,  Zune 4.0, is described in a recent review by Paul Thurrott as “…vastly superior to its only real competition, Apple’s iTunes.” Ouch.  

But as Pinero explained, Zune Pass wielding Mac owners can already use their web browser to listen to their music. What they can’t do on the Mac OS is purchase and manage their music. And that’s where a native version of the Zune software comes in.

This raises the sticky-sweet issue of the Subscription Model, and whether Apple ought to adopt it. It’s a model proven supremely successful by the likes of Rhapsody in the U.S. and Spotify in Europe. Let’s take a quick look at those services.

Spotify

Spotify is, at its most basic level, completely free (through the unpredictable insertion of thankfully-occasional unskippable ads). An optional monthly fee of £9.99 (around USD$15) buys the user a Premium Account, banishing the ads and allowing the user to store streamed songs locally on their desktop computer (and now iPhone) for listening offline.

Rhapsody

Rhapsody doesn’t offer a free service, and at $12.99 its cheapest membership level is relatively expensive when compared to Spotify. For two dollars more, Rhapsody users can store music for offline listening.

Zune Pass

Zune Pass comes in at one price only — a hefty $14.99 — and offers both unlimited streamed music and a selection of 10 downloadable tracks each month that are yours to keep. That’s 120 songs per year. If you have a PC and a Zune player, you can store songs for offline playing.

Now consider how Apple could dominate this market. At its September 9 Press Event Steve Jobs said Apple manages over one hundred million active iTunes accounts with credit cards. That’s a staggeringly huge number, and even if we make some pretty conservative estimates, we still arrive at impressive results. Try this on for size; if Apple launched a monthly subscription service, priced at just $9.99 per month (cheaper than Zune Pass, Rhapsody and Spotify) and if only one percent of its credit-card-toting iTunes customers signed-up… that’s still almost a billion dollars in the bank, per year.

There’s more. While Rhapsody, Spotify and Zune Pass all cater to our (strictly) musical needs, a subscription service from Apple could potentially draw on the vast repository of content found throughout iTunes. So, to Music we can add TV shows, movies, maybe even custom-made “premium” podcasts from high profile celebrities and artists. And in a post-Tablet 2010, it’s conceivable subscription-based magazines, newspapers, journals and books could be added in to the mix.

Others might have been first to the Subscription Model party, but it’s easy to imagine the Apple pitch: “Today, Apple reinvents the Subscription model…” only, y’know, they’d say something way more funky than that.

I can’t believe I’m excited at the prospect of yet another reason to give Apple my money. But I do believe this is a service Apple would do well to consider. The Rhapsody’s and Spotify’s of this world prove there’s a growing, lucrative market demand for streaming content. That Microsoft is seriously considering expanding its Zune Pass service to other platforms tells me, beyond a shadow of doubt, there’s gold in them thar hills. I wonder if Apple has noticed?

  1. Dumb idea, but just the kind of half-brained thing that Microsoft would do. Anyone who has gone out an bought a Mac obviously knows a stable, well designed product from the crap that Microsoft sells. I don’t think anyone with a Mac would actually go out and buy a Zune over an iPod. The only reason Microsoft has sold any Zunes is because there are still some uneducated PC users out there that think iPods only run on Macs.

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    1. Why is it dumb? We know from a recent study that Apple users, rather than being Apple purists and quite possibly mentally retarded, own multiple computers and electronic devices. The Zune devices, in particular the Zune HD, is a very nice device. In the words of one online columnist, it’s quite possibly the best music dedicated music player available.

      As a result, it makes really good sense for Microsoft to bring their Zune (and subscription model) to the Mac platform. I sat down and calculated it the other day. Between iTunes and Amazon MP3, I typically buy one or two albums a month. This works out to about $18 or so. That more than pays for the Zune subscription, which gets me unlimited music (of which, I get to keep 10 tracks, or about 1 album). Getting a Zune, given my habits, would actually save me money.

      What’s the big thing holding me back? Lack of a Mac specific client. If they solved that problem, I’d both get a Zune and sign up for their subscription plan.

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  2. >> that’s still almost a billion dollars in the bank, per year.

    Yep, a billion dollars in the bank. Not like there’s any overhead or additional fees that need to be paid to the recording industry. A billion dollars of pure profit.

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  3. How many times must the marketplace say that it doesn’t prefer a subscription music service?

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    1. Until they get the message! I rather Apple did not do Subscription Base Music I rather own my music. I can’t believe the Music Industry is this stupid in supporting this. I can’t see any artist getting paid off this business model.

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    2. There’s a difference between saying “No subscription music service” and “Not that subscription music service.” Most of the services heretofore offered have been pretty lackluster.

      The Zune service, however, appears to be an exception. The big changer? Allowing me to keep about one album per month. If you subtract out the album, then it’s suddenly five dollars a month.

      I’ll pay $5 a month for unlimited music. Particularly since it frees me from torrents and activity of dubious legal nature. I didn’t care so much when I was younger, but have changed my mind as I’ve gotten older.

      And if they started offering video … well … just sign me up now.

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    3. I’m not sure that’s the case. I want to own my favorite music–I don’t want to rent it. That said, I might be willing to rent songs in order to determine whether or not they will become my favorites.

      At the moment, most of the music that I buy I have discovered from sources other than iTunes. I hear it on the radio or in a movie or TV show. iTunes isn’t all that great for determining whether or not you like a particular song.

      Subscriptions aren’t a bad way to go in that case. But, if I were Apple, I’d take it a step further with smart playlists.

      I might create a “morning commute” playlist. It would contain 37 of my favorite songs. It would contain all songs on Billboard Magazine’s Top 20 whose genre is not “Rap” or “Country.” It would contain short news, sports, and weather podcasts.

      So every night, I’d plug in my iPod and when I wake up in the morning, I’d have a nice fresh playlist with everything I want to listen to on the ride to work. I hit the “Shuffle” button and I’m good to go.

      For things that have Internet connections (iPhones and iPods), I could even have it wirelessly sync an “afternoon commute” playlist with 43 of my favorite songs, items on the Billboard Top 20 whose genre is “Pop” or “Dance” (I’m a little more upbeat in the afternoons) and the news podcasts (I already know the weather and sports).

      Who needs radio?

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  4. I’m not sure I see the benefit in this for Apple. You can say “a billion dollars” but the only people that would move to a $10 subscription are people who spend *more* than $10 a month currently – on whom Apple would then lose money. Whereas most people that spend less than $10 are gonna stick with their current buying habits… so where’s the profit?

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  5. Jim Glidewell Friday, October 9, 2009

    A move to subscription music is a move *back* to DRM. Apple has worked and positioned itself for *years* to finally get rid of DRM on music (I believe that they have held variable pricing in their back pocket as a bargaining chip to kill off DRM since the very beginning).

    Apple’s strategies in this area show clearly that they view DRM as a strategic disadvantage as the #2 OS vendor. DRM, and other non-open standards like Flash, take away Apple’s control of the customer’s experience, and let the DRM vendors hold Apple customers hostage by choosing or not choosing to support OS X, or by providing a second-class experience (Flash) on the Mac platform.

    It is not impossible that Apple will resurrect FairPlay once again, as a subscription music wrapper, but I think it very unlikely.

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    1. While I agree with the sentiment, Apple was the very last to move away from DRM completely. And the only real leadership they showed was the laughable “Open Letter.” Every other action: charging more for DRM free tracks and only bullying the smallest of the labels into opening up their catalog, appeared designed from the start to show one thing: people don’t care about copy protection on their music.

      More likely, I bet something along the lines of the following was getting discussed in Apple board meetings: “Sure, there’s a very vocal minority who make a lot of noise, but it doesn’t make a difference to the average consumer.”

      In case you hadn’t noticed, Steve Jobs and Apple have ocasionally been known to say one thing in public and then do something completely different. After all, why would Apple want to lose Fair Play (or whatever their DRM scheme is called)? It forced people to stay with the iPod line.

      I think a much more accurate interpretation of their actions is that Apple only started becoming enthusiastic about DRM-free when Amazon MP3 and other groups started showing that they were going to lose business by not making the move. Yeah, it probably was all orchestrated by the Music Labels (in order to weaken Apple’s media position), but that’s just fine by me. We still got the Amazon MP3 store in the process, and in case you hadn’t noticed, Amazon is almost always cheaper than iTunes.

      I think that if Apple could find a new way to tie consumers to the iPod, they would jump on it in a heartbeat.

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  6. A subscription model for music? I wouldn’t buy it. A subscription model for iTunes’ TV and Movie catalog? Now that I would consider seriously. I could dump my cable, download what I want to watch, when I want it. If they went that route, apple tv’s would fly off the shelves.

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  7. Apart from the subscription model – I think the new Zune HD is an interesting device. The GUI looks unique and together with the Zune software it’s the best what Microsoft has ever down in software development.

    The Zune software would be interesting on the Mac. It looks great.

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  8. Math tutorial:

    1% of 100,000,000 iTunes accounts = 1,000,000

    $10 per month subscription = $10,000,000 per month

    12 months gross revenue = $120,000,000

    Not close to a billion in the bank each year me thinks.

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  9. I can’t believe that you have quoted two of the biggest Microsoft zealots around. Paul Thurrott thinks that everything Microsoft makes is ‘vastly superior to Apple’. That would include Vista. Visit his winsupersite and find out. He consistently posts anti-Apple FUD at his bog, calling Apple liars and evil. And MaryJo is just a MS prostitute. Journalist should not be as biased as those two. Paul is just a common blogger supporting his favorite team and distorting the facts about the competition. MJ just thinks that MS can do no wrong and adds mounds of hype about miserable products.

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  10. >>The latest version, Zune 4.0, is described in a recent review by Paul Thurrott as “…vastly superior to its only real competition, Apple’s iTunes.” <<

    I have read that interview and it shows the lack of detail Microsoft is giving their products. Overall it's looking good and functionality is given, but the details.

    Now I know what a Zune pass is, but I want music to belong to me. I'm so oldschool ^^

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  11. I don’t think everyone is getting that the Zune Pass isn’t merely a subscription model. You keep 10 songs each month, DRM free; this changes the dynamic quite a bit. These songs are yours for life. It’s smart, and it’s the way people are migrating. Netflix, BaseCamp, and MobileMe are all great examples. If Apple doesn’t do something, it will lose a chunck of it’s share. I’m a Mac user with an iPhone, and my household has a Zune Pass. I haven’t needed to purchase a song from iTunes for sometime now.

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