Earlier today, Verizon Wireless began online sales of the Kin, the first phone to feature a built-in version of Microsoft's Zune player. But I think the companies missed a historic opportunity to sell the first phone in the United States with a bundled on-demand music service.
The phone itself is getting mixed reviews, with praise focusing on its music and social-networking features, and criticism for its sluggish performance and feature omissions, like the lack of a calendar and the inability to send photos or direct messages to Twitter.
The price also seems high: the larger Kin Two, which costs $99.99 with a two-year contract and $100 rebate, is the same price as some smartphones with more features. Verizon isn't giving customers a break on plans either, forcing people to buy a full data plan for $29.99 a month, even though the Kin sends and receives data in much smaller batches than smartphones like the iPhone--for instance, full-resolution photos are actually stored on a Microsoft-hosted Web site rather than the phone itself, then uploaded from that Web site to social-networking sites like Facebook.
But to me, the most startling part of Verizon's sales plan is that the sign-up process for the Kin never offers customers the option of buying a Zune Pass. The devices themselves only come with 4GB and 8GB of storage respectively, which isn't nearly enough for serious music collections.
The obvious answer is a subscription-based music service, which offers unlimited access to a massive library of songs. The Zune Pass is one of the better values among these services: it costs $14.99 a month, $5 more than Rhapsody, but it comes with 10 permanent downloads per month, in addition to unlimited streams and downloads that last as long as you continue to pay your subscription. Customers can try it out with a 14-day free trial. But they still have to go to Microsoft's Zune site to sign up.
I think bundling is the only way subscription-based music services will ever work. Customers balk at paying yet another bill "just for music," but $14.99 doesn't look like all that much when it's part of a $100 phone bill. And once music fans have tried the Zune Pass for a few months and become accustomed to having millions of songs at their fingertips, I think they'll be reluctant to go back to the old-fashioned way of ripping, downloading, and transferring files back and forth among various devices.
Fortunately, Microsoft and Verizon have a chance to fix this problem: phones based on the Windows Phone 7 platform are coming out later in 2010. These phones will also come with the Zune music interface, and Verizon will also sell them. So how about bundling the 14-day free Zune Pass trial with the phones--no user intervention required--then allowing customers to pay their monthly subscription on their phone bills?