Microsoft is trying to push Zune sales along with a price cut, as CNET's Ina Fried already reported Tuesday, and Donald Bell has the scoop on the firmware update that will deliver bug fixes, three new games, and head-to-head Texas Hold 'Em via the Zune's Wi-Fi transceiver.
But the most interesting part of the announcement was the advertising campaign. Not the advertisements themselves, although I'll be interested to see what the oddballs at Crispin Porter + Bogusky (who did the Gates-Seinfeld and "I'm a PC" ads) come up with. The fascinating part is that the campaign will focus on convincing users to download the free Zune software. Microsoft will still be doing other forms of advertising for the Zune players, but this TV campaign is all about promoting a product from which Microsoft earns no direct revenue.
The new Zune advertising campaign focuses on the brand and the software, not the devices.
(Credit: Microsoft)Why? Because music players were never the endgame. The company has always said that Zune is meant to be a broader entertainment brand that will find its way into other products. As I've posted before, a Zune interface for Windows Mobile 7 is a near-certainty, but I also would expect the Zune Marketplace to find its way into Xbox Live in short order--in fact, the new Xbox Live Experience gives Microsoft a much smoother way to introduce new features than the old "blades." I could also see Microsoft adding a Zune Marketplace page to the Media Center interface in Windows 7.
Of course, this (once again) raises the question of the future of the Windows Media Player. So far, Microsoft is committed to releasing a new version of the Media Player with Windows 7, in part for corporate customers who would never allow consumer software like Zune anywhere near their employees' PCs, but who still need media playback for corporate videos--training, presentations, and the like. But as long as Microsoft has three teams working on three digital media interfaces for Windows--the Zune software, the Media Player, and the Media Center software--there's room for consolidation, and my guess is that the Media Player will eventually get no further updates.
Update at 5:10 p.m. PDT: Changes were made based on a draft version of the Windows 7 Reviewers' Guide.
Microsoft took the wraps off the next version of Windows Tuesday at its Professional Developers Conference, and the Web's abuzz with first impressions and previews--most of which are positive.
It looks like Microsoft is making the right moves to counter some of the problems with Vista: application and hardware compatibility are top priorities, and most of the UI tweaks I've seen so far seem helpful rather than arbitrary, as many of the changes in Vista seemed to be. But the release of Windows 7 is still a year away, and there will no doubt be modifications between now and then.
But forget the big picture...what's in store for digital audio in the next version of Windows? Here's a quick rundown of what in known based on the very early pre-beta shown in Los Angeles:
The Media Center interface in Windows 7 will scroll through album covers in your collection when you play a song.
(Credit: Charlie Owen, Microsoft) Media Player not dead. Windows 7 will ship with a new version of the Windows Media Player. This is somewhat surprising, given Microsoft's complete neglect of the Media Player since Vista's release and its emphasis on the Zune PC software, which has its own playback and organizational features. But apparently Microsoft has realized that native playback of digital media within Windows is too important to force people to download an application separately. This is not the case with some other applications--for instance, Windows 7 will not come with Mail/Outlook Express, Photo Gallery, or Movie Maker--instead, users will have to download Windows Live versions of these applications. (Or PC makers will have to pre-bundle them.)
Non-Microsoft formats supported. Microsoft is at long last capitulating to the inevitable and natively supporting AAC audio (as well as H.264 video--both are parts of the MPEG-4 standard), which has become a dominant format thanks to Apple's AAC support in iTunes. For years, Microsoft used the Player to promote its own Windows Media format--for instance, it didn't support full-bitrate ripping of CDs to MP3 until Windows Media Player 10, released in 2004--but apparently the Media Player team is following Zune's lead here.
Networked music. Microsoft promises major ease-of-use improvements for home networking in Windows 7 (hallelujah), and streaming home audio is no exception. You'll be able to stream media from any Windows 7 PC to any network-connected device that supports version 1.5 of the Digital Living Network Alliance (DLNA) standard, and vice-versa. The Windows Media Player will even transcode your media on the fly to the appropriate format for each device on your network. This sounds great on paper, but of course the devil's in the implementation details. Still, it's a great step forward from Windows Media Connect in XP and Vista, which only supports the Xbox 360 and a handful of other devices.
Bluetooth audio. Windows 7 includes a Bluetooth audio driver, meaning it will natively support Bluetooth speakers and headphones--no installation required. (The lack of support for Bluetooth audio in Vista drew lots of complaints.)
Intelligent routing. Microsoft promises that audio will flow more reliably to the proper devices--for example, a song will naturally play over your speakers, while a Voice-over-IP call will flow to your headphones. Again, nice idea, but wait to see if the implementation works.
Libraries. A new feature, Libraries, will arrange similar types of files from across your PC--and across all the PCs in your network--within a single virtual folder. So all your music, even files you've neglected to put in your MyMusic folder, will appear in this virtual Music Library, which should make it easier to organize and find songs outside the context of the Media Player or Zune (or iTunes) libraries.
Music Wall. It looks like the Media Center team has borrowed a trick from the Zune PC software: when you're listening to an album in Media Center, the background will gradually scroll through images from all the album art in your collection.
"Integrated innovation" was a Bill Gates mantra, and may leave the building when he retires. But even without Bill's blessing, outsiders often imagine Microsoft quickly stitching different products together into a more coherent whole. For example, why can't Microsoft operate a single download marketplace offering music, video, and games, and make that marketplace accessible from the Media Center interface, Xbox Live, Zune PC software, and its Mediaroom IPTV system? And come to think of it, Netflix CEO Reed Hastings joined Microsoft's board of directors last year--why not offer movie rentals as well?
The trouble with such scenarios is that they're easy to draw on a whiteboard but complicated to execute. Say you combine the Xbox Live Marketplace and the Zune Marketplace--how do you cut the 10 million current Xbox Live customers over to the new service without interruptions? How do you tailor the interface and featured content to the device accessing it? How do you convince owners of movies and downloadable video games, who thought they were licensing content to a relatively closed system (Xbox Live) to offer that content to millions of Internet-connected PCs, where the risk of piracy is higher? Worse yet, if you decide to take the tough road of integration, by the time you've coordinated development between all the different product teams, alerted partners and the sales channel to the new strategy, and finished the long march, the market may already have moved on to the next big thing.
Two fellow Microsoft-watchers, Todd Bishop of the Seattle P-I and Mary Jo Foley of ZDNet, have both commented on the move of former Media Center leader Joe Belfiore to the Zune team, which Directions on Microsoft noticed in our latest tracking of the Microsoft organizational structure. (Todd called me for comment and quotes me in his blog posting, but I haven't talked to Mary Jo about this, and am not the anonymous source she cites--I have no knowledge of the initiative she's blogging about.) Belfiore oversaw Microsoft's eHome initiative, which created the Media Center PC, and his background in video could indeed mean that Microsoft is considering building a video marketplace for Zune.
Then again...Rick Thompson, who at one time worked in the same broad business group as Belfiore (looking at "advanced scenarios" for Windows PCs) and has a background in the Microsoft Hardware division, is also a vice president in the Zune group, having moved there last October. Does that mean that Microsoft wants more hardware expertise on the team? Xbox guru J Allard continues to be involved as well, and we know that Microsoft's looking at developing games for the Zune. Then there's the whole Danger acquisition and rumored Zune phone.
Meanwhile, we haven't seen Microsoft trumpet any NPD figures for the holiday season, which leads me to believe that Zune 2.0 didn't sell very well, and is probably not in the No. 2 spot that Microsoft was aiming for.
In other words: Zune as a music-focused player is not competitive, and Microsoft has a lot of cooks in the kitchen trying to make something new out of it. We could see a bunch of Zune-branded devices with slightly different feature sets--the "traditional" Zune might add video content and simple games, but we could also see Zune-branded devices focused on portable gaming (competing with the Sony PSP and Nintendo DS) and with telephony functions (competing with the iPhone), but all featuring music playback and using the Zune software. Or, the brand might disappear entirely and be replaced by the next greatest thing ever. Whatever the precise brands and products look like, Microsoft isn't giving up on the portable entertainment space, and music will continue to be a part of that initiative.
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