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Summary:

Microsoft announced plans to expand its Zune marketplace overseas and giving users three-screen access to content that they buy on their PCs, Xbox 360 and Windows Phone 7 mobile devices. But the Zune marketplace is doomed to fail because users don’t want another siloed digital storefront.

zune

Microsoft has announced ambitious plans for expanding its Zune music and movie marketplace overseas and giving users three-screen access to content that they buy on their PCs, Xbox 360 game consoles and Windows Phone 7 mobile devices. But the Zune marketplace, like a similar offering soon coming out from Sony later this year, is doomed to fail for one simple reason: users don’t want or need another siloed digital storefront.

Extending its Zune marketplace to another screen — the mobile phone — and to international markets will give Microsoft more eyeballs and more users to sell and rent videos. But the broader capability of letting users pay for a piece of content and to view it on multiple devices is one that Microsoft will have a hard time selling to consumers.

In that respect, Microsoft is not alone; Sony is also planning a digital marketplace that will extend videos available through its PlayStation Network to other devices, including broadband-connected Bravia HDTVs, Blu-ray players, Sony Ericsson mobile devices and Sony PCs. The new service, dubbed Qriocity, will be launched later this year.

The problem is that, for the most part, people don’t buy their consumer electronics based on brand, so the likelihood of someone having a Sony PlayStation, Bravia TV, Sony Ericsson phone and PC with Sony software pre-installed is extremely low. Same with the likelihood of someone owning a Microsoft Xbox and a Windows Phone 7 mobile handset. As a result, the number of users that will find value in such a service is bound to be limited to just a few.

Apple is an outlier, in this respect. It’s the only consumer electronics manufacturer that has reached scale with a digital marketplace that reaches multiple devices. With iTunes, Apple can sell music, movies and TV shows to PCs, iOS mobile devices and Apple TV broadband set-top boxes. But Microsoft and Sony — both of which have tried to build proprietary music services in the past, let’s remember — will have a hard time replicating this success.

What’s needed is not a digital storefront that works on just Microsoft devices, or just Sony devices, or even just Apple devices — but a marketplace that allows you to purchase and use content that across multiple devices from multiple consumer electronics manufacturers. That way, I could buy a movie on my PC and access it on my TV, my mobile phone and through my gaming system without being tied to a certain vendor or a certain operating system.

Luckily, that sort of capability is already in the works. A group of consumer electronics manufacturers and content providers have formed the Digital Entertainment Content Ecosystem (DECE for short), which is focused on providing a framework for delivering content from multiple providers sold through a number of different digital storefronts to various devices that a consumer might own.

The DECE’s DRM System, which has the brand name UltraViolet, was announced earlier this summer and could be available in consumer electronics devices by the end of the year. Sony and Microsoft are both part of the DECE, and if they’re smart, in addition to their own branded CE devices, they’ll make content from the Zune and Qriocity marketplaces available through UltraViolet-supported devices as well.

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  1. The only hope Microsoft has is leveraging the large Xbox installed base for a digital marketplace. They need to expand outward from that, like Apple did w/music & iTunes.

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    1. Yes, but a digital marketplace only available on Microsoft products isn’t one that anyone is going to want to buy from.

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      1. Not sure about that. 40 million Xbox 360s and a huge installed base for Xbox Live says they already have a big marketplace. I think they need to put Xbox Marketplace on the Windows Phone, and they could bring along a significant percentage of those users.

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      2. idiot, bring the facts! dont just yell whatever you think on blog/news sites.

        actually, why do you hate Microsoft so much, er..you like Zune :D, oh, your belief is that you cannot become a tech guy unless you hate Microsoft.

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  2. Sorry but this paragraph does not make sense:

    “What’s needed is not a digital storefront that works on just Microsoft devices, or just Sony devices, or even just Apple devices — but a marketplace that allows you to purchase and use content that across multiple devices from multiple consumer electronics manufacturers. That way, I could buy a movie on my PC and access it on my TV, my mobile phone and through my gaming system without being tied to a certain vendor or a certain operating system.”

    Music purchased through Zune can be played on any type of device. Songs purchased with Zune are DRN free MP3. I believe movies are similar.

    Also, with Apple products you’re stuck with using the clunky iTunes software. Apple really needs to update its interface. I no longer use iTunes to find music for my iPod. I use Bing. Often I download remixes of songs. Since many songs have more than one remixe, I like to sample the song. With Bing, I can listen to the entire song, not just 30 seconds, for the first time. After that, the song previews for 30 seconds. Also, the interface for Bing is much easier to use than iTunes.

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    1. James – There’s no way any of these digital storefronts are going to be offering up DRM-free video, I can promise you that.

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      1. Which is very very very sad for the consumer.

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    2. As a Mac user, how do I buy songs through Zune?

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  3. Why the world doesn’t need a GigaOM: This article is flawed. First, users do ask for Zune, by name, so “users don’t want” is a strange statement. It’s wanted because many people want a good cross-device subscription model. I’m never doing the $0.99 per track thing. Yet, the Marketplace is not just a subscription spot… it’s a place you get unencumbered mp3s to take with you just like every other DRM-free store. Not to mention you get 10 of those free plus the unlimited music.

    Is there a reason for a ton of stores like Amazon to be able to provide content but Microsoft should not be allowed to? Where’s the “the world doesn not need a Other Company marketplace” article? I for one am happy will have such an excellent media solution built in to my next phone.

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    1. Or at least I should say, the title is flawed for singling out Zune. It’s not fair to say that Apple gets to offer this and Microsoft doesn’t, especially when it’s far more likely that someone owns a Windows phone (or a Zune) also uses a PC and maybe an Xbox, than it’s likely that an iPhone or iPod owner uses a Mac.

      It’s being proposed here that stores work together on the same DRM, which is cool. Somewhat impossible if there’s no-one to participate though. If DECE content comes to be, where shall we purchase it? I’d pick Zune

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    2. Microsoft can offer whatever it wants; I’m merely arguing that a digital storefront that is only for Microsoft products isn’t going to be very compelling. What the world needs is not a Microsoft-specific marketplace and a Sony-specific marketplace and an Apple-specific marketplace — what it needs is one place where I can buy a piece of content and watch it on my Xbox 360 and my PS3 and my Samsung TV and my Android phone.

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  4. Apple is good
    Microsoft is bad
    Please please read my article

    I want to buy from Zune and do.
    It’s cheap and easy (Apple is not)
    It’s great on my PC that connects to my HDTV
    It’s great on my XBox
    It’s going to be great on my future Windows Phone 7
    And if your theoretical bigger better solution arrives…
    I will unsubscribe my $15 per month subscription & switch
    No biggie

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  5. Do you think this article should have been titled “The world doesn’t need another walled garden.” ?? Perhaps leaving Zune out of the argument might have made your point clearer, since it applies across the board, not just to Microsoft.

    We’re able to buy any kind of music, video, and books from brick and mortar stores without restriction, but the dynamics of the digital storefront (and the mobile carriers as well) are firmly entrenched in the “captive audience” mindset, wouldn’t you say?

    Maybe what needs to happen is for a strong disruptive force to come along and break the moats and castle walls that remain in the digital/device space. Until then, each will try to capture and keep customers in their sphere.

    Even so, you can now buy books and videos and read/view them on any device through a variety of means. But a lot of digital music, and all apps and games are still captive. Is it just a matter of time until the rest become “cross platform?”

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  6. One of the things that I like about Zune is the ability to buy songs online from anywhere you are. So if I’m on a friend’s computer I can buy songs from Zune.net and listen to them right on the website. So far I don’t think that Apple has found a way to do this. I will be one of the “select few” that will have a PC, a XBox, and when it comes out I’m gonna sell my iPhone and get a Windows Phone 7.

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  7. Sorry, I really don’t understand the point of this article. We don’t need another store that only works on specific products. But the music in Zune is DRM free. The streaming for the subscription service works on the internet via a web browser.

    The real point here is that we need a multi-vendor registration of ownership. Then you just pick your service provider. We’re a long way from that – and it’s the content providers blocking this. That doesn’t mean we should close the doors to more competition.

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  8. I think . . . that Apple creates great software, albeit, for their own operating environment. Even the latest update for iTunes, version 10, iTunes to me and as well as a few others that I’ve spoken with, feels more like bloatware and isn’t all that easy to navigate through, plus it’s rather unstable on Windows. On the other hand, Zune is quite the contender to the iPod and to iTunes as well; It feels more seamless and I don’t ever get the feeling that it’s going to become unstable during a download and quit responding or working. I guess it’s just a matter of opinion and personal taste, that’s why it will stick around at least until a while longer because it’s sales are pretty good considering it really was late in the game, but most importantly, competition is great for the market and the consumer should definitely be a proponent of such, which makes me wonder why the author posted this :/

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  9. I don’t the DECE, the manufacturer and content group consortium, is going to work either.

    It didn’t work the first time when it was called PlaysForSure; what’s different now?

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    1. Well, I think the difference is that 1) it isn’t a vendor-led initiative, like PlaysForSure was, and 2) the consortium isn’t dictating DRM or file type specifications, just how the devices tie into the rights clearinghouse to verify a user has bought the piece of content.

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  10. I don’t think the DECE, the manufacturer and content group consortium, is going to work either.

    It didn’t work the first time when it was called PlaysForSure; what’s different now?

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