Microsoft rips a page from Spotify's playbook to take on iTunes
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Microsoft rips a page from Spotify's playbook to take on iTunes
Xbox Music joins a growing list of streaming services that should have Apple worried
Apple has been the king of the digital music world for most of the last decade, and its iTunes Store continues to dominate
the online music industry despite recent challenges from Amazon and
Google. The combination of a tightly-integrated storefront and killer
hardware gave Apple a combination that other competitors were unable to
match — but just as consumers started shifting from physical to digital
media a decade ago, we're at the beginning of another sea change in
music. Companies like Spotify, MOG, and Rdio have emerged over the last
few years, offering the promise of all the music you can handle anywhere
you go, for the same price each month that you'd pay iTunes for a mere
ten songs.
While Apple hasn't yet mustered a response to this growing trend,
sticking with its hugely successful virtual record store model,
Microsoft just announced it's ready to take on the streaming
competition. The new Xbox Music
is an all-in-one service that's equal parts iTunes and Spotify — while
Microsoft is keeping the same a la carte store that it has offered for
years, it's augmenting that with an updated version of its Zune Pass
streaming service. For the first time, Microsoft will offer free,
ad-supported streaming to anyone using a Windows 8 PC — just like
Spotify — or a Windows 8 or RT tablet. There's also a Pandora-style
Smart DJ feature for making artist-specific "stations," and for $9.99 a
month, users can access also sync music to their Windows Phone 8 device
and Xbox 360.
We're at the beginning of another sea change in music
With this new service, Microsoft isn't directly trying to beat Apple
— it's going after Spotify, Rdio, and all the rest of the streaming
players out there. If Microsoft can be successful, Apple will be in the
unfamiliar position of having to play catch-up in the digital music
space for the first time. Success for Microsoft is far from assured —
the company hasn't made much of a dent in the music world thus far — but
it's hoping to use the strength of the Xbox brand, the ubiquity of the
Xbox 360 console, and the wave of interest in its massive Windows 8
redesign to carve out a place of strength in the streaming world.
"We really wanted to build something from the ground up that solved a
consumer problem," says Jerry Johnson, GM of Xbox Music. "It was clear
to us that rebranding Zune doesn't solve the problem." Chief among the
issues Johnson's team identified was the fragmented music experience
many consumers have to deal with. Many music listeners have legacy
collections of MP3s and also now use streaming services, sometimes more
than one — Microsoft hopes to offer them a single experience that
encompasses all listening options. Easier discovery and sharing of new
music is another area that the company hopes to improve upon. "We wanted
to do this with an all-in-one solution — music shouldn't be work, it
should just work," Johnson says.
"Music shouldn't be work, it should just work."
Even though Microsoft hasn't met with much success selling songs and
albums a la carte, the company still sees it as an important part of its
offering. As Johnson told The Verge, the whole concept of Xbox Music is
"consumer choice." With both streaming and purchase options, Johnson
gave the example of users either shelling out cash to hear a new album
immediately, or waiting a few days for it to show up as a streaming
option. He rhetorically asked me whether the average consumer "should
have to understand what a specific band or label decided to with how
they released the music?" Answering his own question, Johnson says, "no —
they should just be able to go and find it."
With Xbox Music's free streaming option, the company is adopting nearly
all of the main features Spotify offers. All of the major streaming
services offer a free option where listeners are tethered to their
desktop and must deal with ads or a limited quantity of music each
month. Paid users can access that music pretty much anywhere they are,
through desktop apps, the browser (in the case of Rdio, MOG, and
eventually Xbox Music), and — most crucially — on a mobile phone. It
doesn't hurt that many of these services plug right into Facebook, the
dominant social platform of our age — it's now exceedingly easy to
actively share music with your friends as well as see an ongoing stream
of what those friends are listening to.
Social has long been an Achilles' heel for Apple
Social has long been an Achilles' heel for Apple, and iTunes
continues to be no exception. As the software and store are based off an
ownership model, users are not permitted to share songs with each other
— the only built-in option is sharing links to songs in the iTunes
Store via Facebook, Twitter, or email. Ping, Apple's recently-shuttered,
first-party attempt at a social music service, was one of the company's
most uninspired products and a perfect example of how out-of-touch
Apple can be when it comes to the web. Sooner or later, that's going to
have to change — if Apple ever launches a music service that isn't based
on a la carte purchasing, social integration and easy sharing of music
will need to be at the forefront, and the company hasn't yet really
proved it's up to the task.
For its part, Microsoft is certainly not downplaying social, but nor
is it going overboard at launch. "Sharing of music is very important,"
Johnson says, "and it's something we believe needs to be done in a
measured and careful way." Specifically, Johnson's referring to
"passive" sharing via the social graph and Facebook — "the hardcore
group will like it if their friends are very much music enthusiasts, but
you'll also hear a big group say they get very annoyed at the volume of
things that flow through there." Xbox Music allows for active sharing
via the Windows 8 charm bar, but passive sharing won't be implemented
until next year. In addition to the "overshare," Johnson also wants to
protect users who might not want to share their "guilty pleasure"
listening habits to all of their friends on Facebook — though Johnson
wasn't able to share how it'll overcome these pitfalls.
As important as those social hooks are, it's the integration with
smartphones and tablets that really makes this generation of streaming,
subscription services a viable option compared to their predecessors
from the mid-2000s. For years, the vertically integrated iTunes and iPod
combo was untouched by competition, but the launch of Apple's App Store
in 2008 helped to break up this stranglehold. Finally, competing
services had a way into Apple's hardware, which was previously locked
down as tight as a bank. As iOS users now have a wide variety of music
services to choose from, it seemed that Apple would have to offer
streaming services of its own — but Apple's only move into the cloud has
been iTunes Match.
Microsoft is gunning for all users, regardless of platform preference
Meanwhile, Microsoft already has plans to go after iOS and Android
users as well as its Windows base with the planned launch of dedicated
apps next year. "The feature sets aren't locked in those clients right
now," Johnson says, but offering a quality, full-featured experience
across all platforms is going to be important for Xbox Music's long-term
success." While he couldn't commit to feature parity, Johnson says,
"how we extend that experience out to iOS and Android is critical for
our business." After using its free service to get a user "engaged in
music," Johnson told us the next step is to let users take their music
with them anywhere — and the focus on Android and iOS clients seems like
a tacit admission that Microsoft isn't assuming everyone will be doing
that with a Windows Phone device.
As important as the all-in-one service and Microsoft's cross-platform
plans are, Johnson also repeatedly stressed the importance of
international to Xbox Music — it's launching in 22 countries, with free
streaming available in 15 of them. Streaming will be particularly
important internationally — while streaming may not yet rule the US,
there are a lot of countries where consumers have zero interest in
buying music a la carte but have no issue with signing up for Spotify.
Apple doesn't have an answer for those countries yet — but Microsoft
does.
At the end of the day, Apple isn't ignoring this shift — reports are surfacing
that Apple will have a new, streaming radio-style service ready in
early 2013. And while people have expected Apple to tackle streaming for
nearly three years, since its purchase of Lala in late 2009, it's
obviously not a simple undertaking. "Building this type of all-in-one
service with hundreds of deals in place was not a small task," says
Johnson. He says it took Microsoft about 12 to 18 months of intense
focus on building a brand new, integrated service, but he was also quick
to mention that the company heavily leveraged its experience with Xbox
Live and Zune. "The [Xbox Live] service components started in 2002, and
Zune launched in 2008," Johnson says. "There's aspects of this related
to building relationships with labels, creating content ingestion
processes and things like that which started back with that.
Apple's most ancient rival has a bold new plan to outdo it
Apple certainly has similar experiences to draw from in creating its
own streaming, all-in-one service of the future — the iTunes Store has
been open for business since 2003. It also has much of the
infrastructure that it needs, with last year's launch of iTunes
purchases in the cloud and iTunes Match. And yet, Apple's faithful
customers are still stuck with files and album purchases. In fact, it's
entirely possible that the music industry is actively working against an
Apple streaming service at this point. The company wielded
unprecedented power for the better part of the 2000s as Apple drove the
move towards paid, digital music — something the music labels
desperately needed. Because of that desperation, the labels became a bit
beholden to Apple, a situation that the labels are likely eager to
avoid as the industry moves towards streaming. However, Apple's now at
the mercy of those labels as it works to negotiate streaming rights, and
it's likely that the labels are holding out for more control (or more
money) this time around.
Regardless of the reasoning, there was no "one more thing"-style surprise relating to iTunes at Apple's iPad mini event
last week; iTunes 11 still isn't available a month and a half after
being announced. Apple had enough of a challenge on its hands fend off
the Spotifys and Rdios of the world — but now, Apple's most ancient
rival has a bold new plan to outdo it in the one space where the company
was essentially unchallenged for so many years. The question now is
whether or not Apple can muster up a response in the time it has before
Windows 8 users are able to install Microsoft's Xbox Music app on their
iPhones and iPads. The clock is officially ticking.
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