Zune exec on phone future, new iPods
There are a number of businesses where Microsoft is playing catch-up these days. But arguably one where the company starts furthest behind is in the music business, where it decided two years ago to scrap its partner approach and go it alone with the Zune in its effort to catch the iPod.
Joe Belfiore
I had a chance on Monday, not just to play around with the latest crop of Zunes, but also to talk strategy with Joe Belfiore, a longtime Microsoftie who moved over earlier this year to head Zune development. I also followed up with him on Wednesday, following Apple's announcements, to get a few more thoughts. (At the end of this post, I've also embedded my video interview with him from Monday.)
In particular, I pressed Belfiore to talk more about how Microsoft plans to unite its still disparate entertainment projects. Microsoft has talked a great deal about the notion of having your content wherever you are and, unlike many companies, it actually has products for the TV, the den, the living room, the car, and the phone. However, to date, few of the company's services really let you take premium content from one place to another.
Belfiore conceded that is true today, saying that the company has focused on improving its individual device experiences first, but he said the company is putting in place mechanisms to allow a more unified experience over time.
"The video store that is in Zune today is the same...back-end as the video store in Xbox today," he said. "While it is true you can't buy a video on an Xbox today and put it on your Zune, We're not really that far off technologically from being able to offer that feature."
There are a variety of hurdles, he said, not all of which are in Microsoft's hands, such as licensing rights. There's also the issue that the numbers of people with multiple devices, say a Zune and Xbox or Zune and Mediaroom IPTV box, aren't that large.
"As more and more people have more than one of those devices, then the cross-device scenarios become more important, and undoubtedly it is something you will see us do at some point in the not-too-distant future," Belfiore said.
Here's what Belfiore had to say in response to some other questions:
Q: What do you think of what Apple announced?
Belfiore: I think that if I am someone who is going to be shopping for an MP3 player this holiday, after hearing the announcements, I am definitely going to be giving Zune a good look.
Here's how the new Zunes stacked up to Apple's now-replaced third-generation iPod Nano (middle).
(Credit: Ina Fried/CNET News)I think Apple has continued to do some nice hardware engineering. The colors are attractive; there are some new hardware features. I definitely think from the perspective of software and services that bring the whole experience to life, our offering is very competitive. We see Apple doing a recommendations feature and we've got a recommendation feature that not just recommends things to buy and gives you things from your collection, but aggregates what your friends are listening to...and if you are a Zune Pass subscriber, we'll give you whole songs to listen to without you having to do any work at all. We think from the perspective of the music enthusiast we think that is a great feature where we compare favorably.
Why did Microsoft get in the Zune business? Why is it an important business to be in?
Belfiore: We think the possibilities for creating value for people around how they are entertained...is incredibly important. The potential for doing great things for people is huge. It can affect a wide range of devices, from portable devices that you carry around to devices that are hooked up to your TV to devices that look like what you think of as your PC or laptop today. We aspire to really making people's lives better in the way they are entertained. Being able to create those connections between people and get them content on whatever kind of device it is, we think is important and compelling and worth doing.
When you look three or five years out, should I be able to go to my car, go to an Internet cafe, go to my phone without any preloaded content and be able to access any content that I have purchased or my personal content?
Belfiore: A good theory for us is pretty close to what you just described--where you can sign into the service and all the music that you like is available immediately to you wherever you are. The videos that you like are available to you wherever you are. And you have ways of trying new things and finding new things because your friends, people you respect, people who are pundits or critics in the industry are all available. It's not simply about passively experiencing the same thing over and over again--unless that's what you want--it's also about discovering new things and being engaged with people.
If you think about Xbox Live as an example. For years and years and years people played games by themselves or with two other friends in the same room. Today there's leader boards and badges and reputations and you can be on a headset playing against somebody halfway around the world. It's the same idea as that, but let's do that across entertainment types.
Obviously the device that the most people have with them at any given time is the mobile phone. How do you guys think about that?
Belfiore: The phone is certainly an interesting device for doing entertainment types of things. It's a device we continually look at trying to improve. We don't have any announcements about what we are doing on the phone at this point in time. We're excited about the progress we've made with Zune and stay tuned.
How important is the car as a place for enjoying entertainment?
Belfiore: I think the car is super-important. For me personally, the two places where I listen to music more than anywhere else are (in) the car and running.
There's a lot of work at Microsoft that we've been doing on the car. The Ford Sync product...has been very successful for Ford. What it tries to do is integrate entertainment experiences and communication experiences in a really seamless way that is optimized for you while you are driving. You just talk to it. We definitely see that as an important, highly used environment for entertainment. We think that the products we have today do a pretty good job and there's lots of room for us to keep doing really great stuff.
What made you want to take the Zune job?
Belfiore: I have been a digital media enthusiast for a long time. When J. (Allard) was moving on and they needed someone to help with the creative direction and execution on Zune, I was excited to go be a part of that. I think Zune is a great opportunity for us to do groundbreaking work.
If you had one hesitation, what was the biggest worry or concern?
Belfiore: The truth is, I didn't have much hesitation. Zune certainly faces a difficult competitive situation but Microsoft has been in that situation many times before and it is an exciting place to be.
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.
Currently And I even see one in the wild on occasion (not quite as rare as a Nessie sighting, but close) and they interest me in the way I would be if I saw a live dodo.
In the long run the stand-alone player will go the way of the Palm Pilot though so Microsoft needs to 1) build a Zune phone and 2) make it as cool as the iPhone (the Zune really falls flat on design) and have business features the iPhone is missing (slider keyboard, Word and Powerpoint support).
Until then it'll be a tough road...
Is that why iTunes' pay-per-song service is now the biggest music retailer in the US, and Amazon's pay-per-song service is rising fast?
If subscription services were so much better than pay-per-song service, then consumers would choose them more than they choose iTunes or Amazon's music services. Subscription services appeal to a certain niche, which is why they are a niche product, rather than the number 1 source for music.
If I had teenagers, I would totally get them a music subscription, and save a lot of money on teeny-bopper music they will sneer at in two years. But for myself, I'm not interested.
Which really makes no sense when you think about it.
And why would the iPod want a slider keyboard? In the name of full disclosure, I own an iPod touch because I can't stand cell phones from anyone. Every hear of award winning design? For the iPhone to have a slider keyboard would mean that Apple wants it to be as conventional and, frankly as dull, as most other phones out there.
Word and PowerPoint support is only a few software updates away for both the touch and iPhone (you don't have to be Steve Jobs to see that such compatibility is on the horizon) while Zunephone is only a glimmer in someone's eye.
Let's give it a couple more years... and see where Zune will stack up against the mighty iPod.
I want song fade in/fade out crossfading so I don't have 3 seconds of silence in my music. I like to see which songs fade into each other smoothly. I enjoy putting together songlist with files that crossfade perfectly. Crossfade, how hard can THAT be?
I also want to view my songs by artist/songs. 99% of the time I don't care or even know what album the song came from. Thanks to Zune, I had to delete ALL the album info from the entire library so I could display the songs W/O album info....thanks MSFT! Now, I can't listen to the FEW albums in the history of music worth listening to start to finish w/o reconstructiong them one at a time.
Why not just chode Song List on the zune?
Your 1 year old iPod would be the same product too, with no scope of any future firmware upgrades. Unlike the Zune.
I would bet that Apple captures a large percent of the Windows market, rather than MS taking over the MP3 market,
The problem is, the Zune keeps competing against the lower-end of the iPod line. I think that's misplaced. If MSFT really wanted to make a splash, they could pump out something with the interface and features of the Touch, but sell them at a lower price. That would be attention-getting, and have potential towards disrupting Apple. Alas, I don't see MSFT doing that - they never really went for the gusto.
Also, if the Zune really wanted to make some headway, make the thing cross-platform. Build clients for it in OSX and Linux - don't be tied to the corporate gospel of 'Windows Only'. Apple went from rookie to champion in this market by making iTunes cross-platform. MSFT is going to have to learn to do the same.
If that's too much to ask of them, then they'll just have to be satisfied with being the hind dog in the pack...
You miss one factor: there's already a healthy market for the low-end of the mp3-playing market. MSFT is competing against the low end for razor-thin margins (where there's a LOT of competition), instead of competing against the high-end for fat margins (which is what Apple did when it first arrived, and continues to do pretty much by itself with its upper-end models).
/P
Your car can probably integrate with any bluetooth device -- not just your ipod. My car allows me to talk and play music through my AT&T Tilt. NBD.
"I gave up my ipod for the Zune. It's one of things that not many people do, but when you do it, you realized you should have done it sooner. Itunes is such a buggy piece of junk. Getting rid of that relic was worth the switch alone."
Which brings up another point. Some people don't like iTunes, and I can respect that. I have no problem with it personally, certainly not enough to base hardware buying decisions on. The Zune, on the other hand, is dependent on even worse software - Windows.
Let me tell you, getting rid of THAT relic is far more satisfying than finding yourself some music management software you like better than iTunes.
They almost caught up PS3 with XBox360...unfortunately, both of them are one generation behind Wii. I am not talking about hardware and speed, I am talking about technologies.
They almost caught up iPod with Zune, unfortunately, Apple has moved away from the traditional iPod toward iPod Touch.
Now, they are scrambling with the cell phone - introducing SkyMarket (clone of App Store) with WM7.
Microsoft needs to go back to the drawing board. Instead of trying to play catch-up. Think leapfrog instead, and think long term. It took Apple almost 10 years to get everything they want in OS X, and yes, it leapfrogged Windows and I don't think if MS can catch up. MS need to think beyond what competitors are offering right now.
Pointing at a statistical outlier (seriously - tablets?) and claiming it to be an example of the norm is not helping your case any.
Well I'm shocked! Shocked to find out that Microsoft has a software bloat problem!
MS needs to be more aggressive with adding features to the Zune through software updates. They've had games available for months, but we are finally getting it rolled into Zune 3 next week. Why did this take so long? Give us more free games.
I can totally imagine it, I have an iPod Touch. I can picture it quite vividly in fact, as if it were right here in my hand.
You're right, it's awesome.
Now I'm visualizing myself playing one of the free games I have loaded on here... or maybe choosing one of the hundreds of other free or paid games that I imagine would be available for such a device, if I had one, which I do.
I am willing to consider the zune next time around, but I'm not going to abandon the iPod ecosystem unless i see some really exciting and different features. "Squirting" is unique (if poorly named) but is dependent on a large existing installed base of Zunes. Until then, it's just an interesting curiosity. I also didn't care much for the user interface when I test drove one this summer (they only just released them in Canada).
You can match specs and features all day, but I like the iPod ecosystem, so Microsoft is going to have to really catch my attention in two or three years when I'm in the market for a new music player.
Aside from the Zune not offering anything significantly different or better than iPod (in fact they're still lagging behind), Microsoft doesn't get the generational aspect at all. In the 70's, Toyota didn't bother with the 30 and above age group. Those people will be buying Caddies, Buicks and Chevies til the day they die. Instead they sold to the twentysomethings knowing that once hooked they'll be buying Toyotas forever. And their kids too, if Toyota unlike GM maintained kept their quality high. Apple is doing the same thing with the Mac. It's a better product than the PC and they're appealing to the youngest generation. Teenagers and college goers today all want Macs. Pretty soon, that generation will be swarming all over the workplace. Guess which way the corporate market will go then?
Zune on the other hand is getting no traction at all from today's teens and young adults. That generation is already wedded to iPod. And as long as iPod maintains its pace of innovation and quality, Zune will get no opening at all to swoop in and capture the next generation.
Game over for Zune. Microsoft's stockholders would be better off if Microsoft stopped pouring money into that bottomless pit.
http://www.autoblog.com/2008/01/03/surprise-fords-sync-sells-cars/
http://www.reuters.com/article/pressRelease/idUS213316+03-Jan-2008+PRN20080103
http://www.trucktrend.com/features/news/2008/163_news030801_ford_sync_sales/index.html
If Ford didn't have exclusive rights to sell Sync they would be in even worse shape. Sync is selling 2:1 over cars without Sync. So yeah, in regards to Sync, Ford is doing well.
If Microsoft is primarily an enterprise solutions company, then drop the idea of being "cool and hip." OTOH, if it wants to be a consumer play, then focus on that.
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by samkass
September 11, 2008 10:46 AM PDT
- Hear hear, Earl! The question "Why did Microsoft get in the Zune business?" Wasn't really answered, and the reporter gave the Microsoft guy a pass. What does Microsoft bring to the table? Their entire business model is based around other people innovating and Microsoft coming in an undercutting them with second-rate bulk-priced technology. Why do they think that strategy will work in the handheld market?
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by David Dudley
September 11, 2008 11:46 AM PDT
- Microsoft got into the portable music market as it is established and has proven to generate significant revenue. Microsoft cannot walk into markets that are not proven as it is not worth their time and will not impact their revenues. Entering a mature market will in fact, create real revenue. And luckily for Microsoft, they have a ton of cash from the OS and Office divisions to fund these kinds of loss leaders. A great book to read on concepts like this would be the Innovator's Dilemma.
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