Zune marketing exec says good-bye to Microsoft

Chris Stephenson, general manager of marketing for Microsoft's Zune music player, is leaving to join Universal Music Group.

Chris Stephenson

(Credit: Microsoft)

Stephenson was one of the people Microsoft tasked in 2006 with trying to cut into Apple's massive lead in music. Despite some early favorable reviews, Zune has so far failed to mount much of a challenge.

Whatever flaws or limitations the Zune did or didn't have, when comparing the music player to the iPod, Microsoft just didn't present enough compelling reasons for owners to switch.

In January, Microsoft reported that Zune sales plunged 54 percent from $185 million in the last quarter of 2007 to $85 million during the same quarter a year later.

Stephenson, whose departure was first reported by the Wall Street Journal, is leaving as the Zune team tries to regroup. The company is in the middle of shifting from a device centered business to one that focuses on the portable player as just one of many places where consumers will be able to access the Zune service. Over time, Microsoft said it will be available on a range of devices, including Windows Mobile phones.

Microsoft is getting behind the launch of the latest version of the device, the touch-screen Zune HD, on September 15.

"I think the latest device and software, which we'll be launching soon, are our best to date," Stephenson told CNET News. "Looking at all the blogs and pre-sales, we've got a great year ahead.

"I think we've established a clear entertainment brand for Microsoft," Stephenson continued. "That's a big win. I'm really proud of our achievements. We've never had a consumer brand in music and video, so coupled with Xbox, we've got a compelling entertainment story and an established internal infrastructure to drive it forward."

Stephenson will become chief marketing officer at Interscope Geffen A&M Records, one of Universal's top labels. His last day at Microsoft is September 4 and he begins working for Interscope three days later.

[The_happy_switcher]

Gone so zune?

[kewell82]

lol :) That took me a second to get it.

[brian.lee]

hahahahah thats a good one.... took me a second as well.

[Random_Walk]

Now c'mon... that was actually funny!

[myles taylor]

"In January, Microsoft reported that Zune sales plunged 54 percent"

So they were never making money or doing that well and then drop 54%. That's pretty bad.

I think they're doing right with the Zune HD but being slightly better or as good isn't going to be enough to cut into the iPod Market share. They have to do way better. The fact that they're about to be passed up again if Apple does anything even remotely interesting with the Touch. So far they are comparing the Zune HD to the current iPod Touch model. Microsoft needs to step up it's game...or rather just get out of this market that it has no aptitude in. Microsoft needs to stay in the markets it excels in.

[Get_a_life_Leo]

That's always been the problem with Zune - it competes with the last but one generation iPod. Microsoft gave Apple over two years space between the release of the iPod Touch and the ZuneHD. While Apple essentially built in a games interface, the ZuneHD will be severely limited (not by hardware) in this area. If Apple adds a camera and GPS to the new iPod Touch, the ZuneHD will be left as a sleek and interesting but overall limited music player. The touted feature that allows the ZuneHD to playback over an HDTV will not be anywhere as compelling as having yet a camera and recording video. The Zune line has carved a small niche of enthusiasts and is trying to integrate with Xbox. Meanwhile Apple has basically dumped the music player alone sector (the non-Touch iPods). The new ZuneHD should do as well as previous Zunes but its simply not a breakthrough product, OLED and Tegra or no OLED and Tegra.....

[captain_numerica]

They were actually in decent shape. Not dethroning iPod by any measure, but making some inroads and revenue. Demand for iPods weathered the economic storm much better than for Zunes (or Sansas, etc).

[DrtyDogg]

"$185 million in the last quarter of 2007 to $85 million during the same quarter a year later." $85 million = total fail huh?

[Maclover1]

@dirty dog 85million does = Fail, if you have put over 500 million into creating and supporting the thing.

My question is has the entertainment division at Microsoft ever made any money? As in they have spent billions on the Xbox and Zune and have they recouped it yet? Are they in the black?

I know at one point the 360 started making money per console sold. However that is just per console and not overall. Then of course there was the billion the wrote off for the 360 RROD repairs.

How long do the shareholders let them throw good money after bad?

[mailbox001]

Zune HD is a great product. Like some of MS products that are great, their problem is always Marketing. They don't do enough to make people aware of their products and the features each one has.

[krootdude]

I completely agree with you.

I have often thought that i could make up better and more stunning ads than their advertising team, but then again I could be mistaken ^^

[slickuser]

the problem is lot of MS products are crap. So, people just don't believe their marketing
if they say their product is good.

you can't change the 1st impression...

[CrashPad63]

slickuser, you have that opinion, most people dont share that with you on most of MS products. Zune has been rated better than Ipod since its first gen, adverts though lacked any draw.

[t8]

I might think about a zune if it was free.
They could make money off me from any songs that I might buy.

Up to you Microsoft. Are you desperate enough? Balls in your court.

[CrashPad63]

t8 youre not coll enough to warrant a Zune.

[Random_Walk]

I wouldn't want to be 'coll' enough to own one either (whatever that means...) ;)

[t8]

I haven't seen anyone with a Zune, so I am not sure if Zune people are coll or nott.

[NPGMBR]

Don't flatter yourself. For some of us the world is much more interesting if we walk against the tide. There is a never ending number of people I see in my commute with iPods and it doesn't bother me at all because I'm quite satisfied with my Zune and I sure as hell don't need to meet any one else's expectations of what cool is.

[t8]

CrashPad63 was the one who said having a Zune meant you needed to be coll (cool).
Argue with him. I don't care about cool either. I care about good and evil.

[gluten4]

NPGMBR:

Owning a zune is walking 'against the tide'?
'Hey, I got *my* mass-produced consumer electronic item from a *different* multi-national corporation!"
Ooh. Edgy.

[empirestatebuddy]

Even though Zunes are a nice device, I think Microsoft would've been better served creating a portable gamer/mp3 under the already established and popular Xbox brand. Then they would've only needed one "marketplace" as well. From what I can tell, Zune is morphing into a phone.

[t8]

Yes that would have been better for them.

They have too many brands now and it is confusing.
And they don't do too well because Microsoft has spread itself too thin.

[TuesdaysDead]

Sadly, it think there's almost a negative aura around the current Zune device to the general public. Whether it's Microsoft's marketing, Apple's dominance or maybe just the original brown Zune's legacy(what were they thinking?!), it's really a shame. Most Zune owners will testify that the Zune is an excellent product on its own right.

[fletchb]

Zune had bugs/QC issues and not as polished as Touch. Boss bought one and it would not install without some media service pack that was not included and couldn't be found. It went back. When Touch first came out it has some bugs in the USB driver but at least it didn't refuse to install unlike Zune.

[X-C3PO]

A guy and his stupid Zune product.. Now after he make another stupid version then run away.

[servermaker]

huh?

[CUTTERDAN]

You people just don't get it! Apple and Microsoft are both great company's. I have a Zune and a ipod, and yes the Zune is playing catch-up in the pmp game, I think they have a great vision for there product and they are chiseling away to create that perfect device. It's all about competition and the consumer is going to benefit in the end, at least someone is trying to nip at Apples heals. I think Microsoft will catch up and pass Apple in the next couple of years if they integrate Xbox, Zune Marketplace, windows mobile, television, and pc seamlessly into one powerful media player for you to enjoy, which the are doing. Oh yeah at half the cost of Apples products $$$.....

[mitzi_moore]

Is it true that Microsoft donates a portion of the profits of Zune sales to the RIAA? That is what keeps me from buying a Zune, as much as I may like them.

[chaunceyo]

Apple is shifting the market towards smartphones. If Microsoft were smart, they'd launch a very ZuneHD like device with WinMo7 on Verizon and Sprint. That market is wide open, and people who are wanting an iPhone might just be willing to give a device that looks this compelling a shot. Neverthess, I think they have a winner with the new Zune - people are ready for a breath of fresh air, the iPod feels like its everywhere nowadays.