May 5, 2008 8:57 PM PDT

Zune: Welcome to the video

A year and a half after debuting its first Zune, Microsoft is finally offering some content that makes use of that big color screen.

The software maker is releasing an update Tuesday to its Zune service that adds a video store with about 800 TV show episodes from NBC Universal, MTV, and a couple of other producers. For the moment, though, the store is far smaller than the TV options from iTunes or even from Microsoft's own Xbox Live Marketplace and offers no feature films.

"We feel it is more important and--customers tell us--to focus on short programming first," said Julio Estrada, general manager of Microsoft's Zune Social unit.

Microsoft also still has no connection between the Zune store and its larger online download site, Xbox Live Marketplace, which sells movies and TV shows directly onto the Xbox. Programs bought on the Xbox still can't be transferred to the Zune, although Estrada notes that video stored on a Zune can be played on an Xbox-connected TV.

That said, the Zune store can boast one thing iTunes doesn't have--the latest episodes of The Office and other NBC shows. NBC pulled the plug on iTunes downloads last fall in a dispute with Apple.

Of note, given that NBC supposedly wanted pricing freedom from Apple, all of the initial Zune videos from it and other content providers will cost roughly the same $1.99 they fetch on iTunes. Estrada said Microsoft could offer lower prices on some content down the road, as well as offer "premium content" at a higher price.

Zune enthusiast sites predicted the video store might be coming after seeing a video tab referenced in some Zune screenshots. It is not, however, the unified Xbox and Zune store that some say Microsoft has in the works.

In another change, Microsoft is trying to further play up the social component of the Zune. The spring update allows users to share their "Zune Card" with friends. With that card, one Zune user can get access to another friend's music playlist, including a list of favorite tracks selected by the user as well as an automatically generated list of songs that the friend has been listening to recently.

And there's the rub. There's no wiggle room. Although I could edit my playlist to reflect what I perceive as the most impressive of my musical likes--R.E.M., Juanes, and Tracy Chapman--anyone I share my Zune card with would also see that I have been listening to Wilson Phillips. (I mean if I were, which I'm not. I admit nothing.)

Estrada conceded that could be an issue, but said Microsoft thought the advantages of dynamically updated content were worth that risk.

"We did not want to constrain the freshness of that list," he said, but added, "We, of course, will continue to listen to user feedback and adjust accordingly."

Another sharing feature will allow those who use Windows Live Messenger to share with their buddy list the song they are playing using the Zune desktop application. That feature will be optional, he said.

Originally posted at Beyond Binary

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.