good story.

pure and simple at heart.

forums, adsense, and the rest is history - all done by a 15yr old for pennies.

to all the haters, shove it - and replicate it, if you're jealous

We think some folks in the industry were expressing hopes for how the entire industry, not just Microsoft, would come to look at content distribution, and some speculation has ensued.

Microsoft spokesman Adam Sohn did tell Saul Hansell, who wrote the original New York Times article, that the companies had agreed to research filtering technology. Meanwhile, while Zune users will have to pay for downloads of 30 Rock and The Office, iPhone users can watch those shows for free. In other words, still no good reason to buy a Zune. (Illustration by Guy K)

The irony here: Before partnering with RealNetworks, MTV ran a music service, Urge, in partnership with Microsoft — which is now trying to buy Yahoo. Timing is everything. We look forward to the introduction of purple Zunes.

In short, there's no loss of brand equity here for Microsoft. The new label suggests that devices and music stores are merely compatible with Windows — the real butter on Microsoft's bread. And even though the stores and players will likely work just as well with Windows XP, Microsoft has just tricked its music partners into giving free advertising to its newer, unloved operating system.

"Um, yeah, currently two Zunes in the top 25 electronics bestsellers on Amazon. Nine iPods." Deathbychici also points out that while Microsoft's heavily discounted $89 30GB model is currently outselling each of the various nine iPod models, different colors of the iPod Nano are outselling the regularly-priced Zune. Ouch.

(Photo by S Baker)

Yesterday morning, according to the almost certainly biased Puget Sound Business Journal, Microsoft's 30-gigabyte $134 Zune held the number one spot, followed by the iPod Nano and Apple's 80GB iPod. Leave it to Microsoft to blow the their chance at taking a bigger lead, though. Microsoft didn't manufacture enough 80GB Zunes and now they won't be availabe on Amazon until "early December." (Photo by S Baker)

When it ties that same back-end service into cell phones — maybe those running Windows Mobile? — it would be capable of serving media to basically any device. With this distribution network, content providers would simply hand over Microsoft the source material, the way they send film reels to theaters, and Allard's division would be responsible for distributing it. The one problem with this idea? Hollywood trusts Microsoft about as far as it can throw it.

Microsoft's Facebook-inspired Zune Social interface wasn't a bad idea — it was just poorly implemented. (Honestly, limiting users to three plays from a wirelessly shared song? That may be enough to know if you hate something, but not if you actually want to buy an album.) Microsoft should beef up the Zune with some serious music-recommending algorithms. It could create some form of lending library so those without subscriptions can borrow tracks or albums from friends for an extended period of time. That could gain it some converts. Copying Apple? All that gets Microsoft is users who want the iPod, but lamer, later, and costlier.

Skeptics will say otherwise. They'll point out how Microsoft made way too many brown Zunes, and the glut of those unloved models has constipated their entire system. They'll drone on about the upcoming release of the Zune 2, and Microsoft's willingness to absorb any cost to grab a piece of the personal media market. They'll do anything but face the truth: that forces beyond our understanding are nudging us all toward Zune ownership, for reasons the human mind cannot begin to comprehend.

Not because Apple's position is unassailable. Not because the music studios are lethargic and notoriously bad at building technology — never mind technology that can reach every platform and device and properly share revenue amongst all artists and labels involved. There are more fundamental problems.

The first problem is thinking that consumers will see this as free and embrace it. Cell-phone carriers, Internet providers, and gadgetmakers are expected to bake the subsidy into the cost of what they are providing. The users, who haven't taken to paying for their own music subscriptions, will see this for what it is. Devices keep getting cheaper. Consumers won't pay extra for an MP3 player, particularly if they only want to play the music they already own. A $5 increase to a monthly cell-phone bill will clearly come across as an additional charge. Users are also likely to have more than one device or service with these additional fees attached. Won't they, inevitably, see this as the music industry double- or triple-dipping?

Secondly, the entire cost burden is placed on the providers. Morris hopes they'll happily accept this arrangement because they'll see the benefit of increased sales. But if every device and service can provide the offering, why would any one player see increased sales? They won't — just increased costs. Morris has proposed tacking on an extra $90 to the cost of a gadget. Microsoft may have caved to a smaller subsidy for its Zune, but no one will accept a $90 subsidy that gains them no advantage.

Morris's Total Music plan sounds like the all-encompassing strategy that the music industry should have had before Napster emerged nearly a decade ago. With a venture called Pressplay, now owned (ironically) by the reborn Napster, Universal has already tried its hand at digital music and failed. Morris has come up with a plan that benefits his industry, not the consumer and not the technology business. By thinking big, he's just made it clear how small his company's role in digital music is doomed to be.

Amazon.com has set the example of a Web-based store, unencumbered by annoying digital-rights-management software. By eschewing DRM, Amazon's downloads play well with any music gadget, including iPods. Would Facebook follow this model — or, like its photos, keep users' content locked into its website interface, playing music, say, on Facebook user profiles? The latter, however, would likely spark a user rebellion, if only because it might remind them too much of raucous MySpace profiles, which start blaring music the moment you load the page.

An obvious fear: Facebook's music store might draw users away from popular third-party Facebook applications like iLike and iMeem. But Facebook could instead design its store to work seamlessly with them, giving them access to an on-site store to close a sale instead of sending users off to iTunes or other stores, as they now must do.

One last option: Facebook might agree with Microsoft, the advertising partner with which it's negotiating the potential sale of a stake in the company, that subscriptions are the future of music.

Whatever Facebook decides on, one thing is sure: The site ensures a captive user base. If the Valley is swooning over Facebook's advertising potential, imagine the reaction when they add an e-commerce revenue stream.

What we do know is Facebook will not offer unrestricted file sharing. How do we know that? They've tried that before. Capitalizing on music sharing's popularity amongst its former core audience of college students, Facebook experimented with a peer-to-peer application called Wirehog in 2004. That legally questionable application has quietly faded into obscurity since Mark Zuckerberg opted for Wall Street and Valley acceptance and wealth over popularity with the college kids. Wise move. By following that path, he's ended up as even more of a rock star.

Wireless sharing of music, a feature that was intentionally crippled when Microsoft first introduced it, and now rendered irrelevant by the spread of DRM-free music downloads. A music store redesign and the launch of a social network are hardly compelling reasons to purchase a Zune. And what would be a true marketplace differentiator, a subscription plan the likes of which Apple CEO Steve Jobs has said he has no plans to offer on the iPod, is tied up in legalities. If we were to adopt the Zune as a global currency, it'd be about as worthless as a ruble in the '90s.

Why, some attendees were treated to one-on-one meetings with Microsoft chairman Bill Gates. We can only imagine what second prize was. Do readers care, though, if the reporters got face time with a billionaire — or that they had to wait a day to read this not very momentous news? "Usually they have embargoes for news people care about," said one reporter in attendance. Heard more news on the new Zune? Break the embargo and send it in.

• November 1996 Yahoo and MTV announce the creation of UnfURLed, "the ultimate guide to music on the Web." The site is promised to launch in January 1997.
• January 1997 UnfURLed does not launch.
• July 1997 UnfURLed launches, six months late. The site later disappears, forgotten.
• February 1999 Viacom acquires Imagine Radio, a service which lets users listen to preprogrammed music channels, or create their own. (If that sounds a lot like Last.fm or Pandora, that's because it was a lot like those sites.)
• May 1999 Viacom acquires SonicNet, an online music-news and information site.
• August 1999 Amid Internet fervor, Viacom creates the MTVi Group as a rollup of its Internet websites, hoping to take it public to cash in on the market for Internet stocks.
• August 2000With an IPO off the boards, Viacom reorganizes MTVi, giving control over websites like MTV.com and VH1.com back to their respective cable channels.
• 2001-2004 MTV does nothing interesting with Internet music for five years or so, as best we can tell.
• April 2005 MTV launches Overdrive, a broadband "channel." MTV later brags about how many "video streams" Overdrive serves, not noticing the complete apathy with which music fans greet it.
• July 2005 News Corp. swoops in and inks a deal to buy the parent company of MySpace. Viacom is widely reported to have been interested in buying MySpace, which gained popularity by embracing music on user profiles and getting bands to use the site to communicate with fans.
• January 2006 Microsoft and MTV launch Urge, an online music store.
• August 2006 Google and MTV announce an experimental deal to distribute videos over Google's AdSense network. The experiment, apparently a failure, dissolves quietly.
• September 2006 Viacom CEO Tom Freston, a longtime MTV exec, is fired, reportedly for missing the chance to buy MySpace. Later that month, Microsoft knifes MTV in the back by announcing its Zune player and companion store, rendering Urge pointless.
• August 2007 MTV merges Urge into RealNetworks' also-struggling Rhapsody music service.

Did I miss anything? Leave a comment below.

• 1. Live Search Club is online gaming, not a reward for searches. Amazon.com's A9 used to provide a 1.57 percent discount on Amazon purchases if users made A9 their default search engine. Google offers random prizes to users who search through the Blingo.com site. Neither effort has provided substantial results. But Club Live has nothing to do with search: Instead, it runs online word games that generate automated search queries. Other programs rewarded fidelity to a search service; the Club just displays search results.
• 2. The games can be gamed. Several sites are offering bots or macros that automatically generate points for Club members. So, not only are human members not utilizing the search queries, but it's not even clear that its users are even human.
• 3. Free stuff = free users. Points earned through Live Search Club games can be redeemed for Microsoft products and swag. Prizes that normally cost hundreds of dollars can be had with a few hours effort, if that. That's one way to move Zune and Windows Vista units, anyway.

The payola scheme is transparent — and Microsoft's competitive advantage looks to be short-lived. Compete has already issued new results that subtract out the Live Search Club traffic. And industry insiders already understand that the results are not "real" search queries. The metrics firms will develop ways to factor out or block non-human bot and macro activity. If they can't, they'll simply eliminate all traffic deriving from Live Search Club.

And Microsoft appears to realize that its game was poorly designed. Vista, a pricey prize, has already been eliminated from the competition after Microsoft realized winners were reselling the licenses. Microsoft has also placed a cap on points earned per game.

Worst of all, the gaming venture has proved a distraction from Microsoft's real search gains. Factoring out the Live Search Club data, Microsoft's search share grew from 8.4 percent to 9.1 percent, a welcome increase after years of reverses. Instead, everyone's talking about how Microsoft tried — and failed — to game the search market.

Microsoft made the projection of one million Zunes by the end of June around its November launch, and a month ago they reiterated that they were "on track." Accomplishing the milestone would be a feather in their cap so they'd certainly want to exploit the press value. But as Thursday wanes, the likelihood of a press release is evaporating. The near perfect projection, made almost eight months ago, would be suspicious anyway — "Has Microsoft been stuffing the channel?" An announcement today would have been somewhat preemptive (we're still around) and at the very least reassuring (hitting their goal three days early, whoopee!) An announcement tomorrow would be contrary, possibly providing some value, but ultimately futile. A Saturday announcement is merely too late, too close. So Microsoft is probably forced to swallow their good news for a later, more meaningful date — "Oh yeah, we accomplished that goal, that was a while ago. We were on target. This is the new Zune."

Otherwise, Microsoft's good news (if they did accomplish the goal) could look exactly like what Nick Denton suggests: burying the bad news. The Zune may be nearing a million units faster than the iPod, but the iPod has also advanced the music player industry to everyone's benefit over the last five years. The good news (a million units in less than 230 days) quickly looks like bad news if Apple announces they sold half a million iPhones over the weekend.

On second thought, maybe they should issue a press release tomorrow... just as the doors at Apple Stores begin to open.

Tech blogger Om Malik, for example, goes overboard in his commentary on the story, comparing Universal to the Mafia. "Any business that perceives its end customers as crooks and thieves should go the way of the a broken ice cream cone on a hot summer afternoon."

Please, Om, this is the New Wave — music companies demanding sweeter deals from more desperate media player makers. It's a Darwinian way to give good players — and by "good players" I mean "the iPod" — an advantage.

Microsoft Strikes Deal for Music [NY Times]
Microsoft, Zune & The Music Mafia [GigaOM]

1. Methinks the lady doth protest too much.
2. Microsoft launches a huge marketing campaign just to get their product known. It takes Jobs one short interview to trash it all.

'Good for the Soul' [Newsweek]

Hebrew linguists are divided over Zune. Tsila Ratner, the head of Hebrew courses in the Department of Hebrew and Jewish Studies at University College London, says Zune is an unsuitable name for a product. However, Haggit Inbar-Littas, a 30-year veteran Hebrew teacher with the London Jewish Cultural Center, says while the name is "ridiculous" and close to the bad word, it's unlikely to be mistaken.

This won't hurt sales for the player (The "FCUK" label is popular, right?), but at least we all have a new curse word to use when our week-old Zunes break.

Microsoft Zune: No sweet tune in Hebrew [InfoWorld]

Tomorrow, Gottfried the Intern will fill you in on all the snark included in the podcast. Our favorite bit so far is when Harris references Microsoft exec J Allard's big Zune blooper: "We made sure it played mpg 4 cause it's a popular format people like to rip their dvds to." You go, piracy boy!

This Week in Tech [Official site]

The Gear Live gadget blog videotaped a preview of the Zune, Microsoft's would-be iPod killer. Blogger Andru Edwards also chatted with the Microsoft employee carrying the Zune, who says on video that Microsoft is "definitely" trying to make Zune a PlaysForSure product. That contradicts Microsoft's message on the Zune, which says that the player will not be part of the "PlaysForSure ecosystem" guaranteed to handle music and videos with Microsoft's branded Digital Rights Management. (Maybe that's good, since PFS devices can't play songs bought on iTunes.)

But after Edwards posted the video, he says, "we got a bit more information from Zune PR." That's industry parlance for "PR is mad that someone screwed up the official story." The flacks told Edwards that Microsoft is not officially planning to make Zune a PFS product. In other words, of course they want to make it PFS, but they're afraid they won't do it in time for launch.

Gear Live Exclusive: Hands-on With Microsoft Zune [Gear Live]