Microsoft attacks iTunes on price, touts subscription model of Zune Pass

Tue, May 12, 2009

Analysis, News

Microsoft’s series of “Laptop Hunter” ads have highlighted the price difference between Macs and their PC counterparts. Now, Microsoft is taking its “Apple is more expensive!” message one step further, this time via a web advert which purports to show how much more expensive it is to download songs via iTunes than it is to accumulate songs via a subscription with Microsoft’s Zune Pass.

The 30 second spot below features Wes Moss, who is referred to as a Certified Financial Planner – I guess that’s supposed to impress us? Or maybe to lend more credibility to his message??

Anyways, Wes Moss points out that if you wanted to fill up a 120 GB iPod Classic with songs from iTunes, it would cost you about $30 grand. That’s some serious cash, and even Wes Moss himself! admits that he doesn’t have that kind of money lying around. So instead, he proposes Microsoft’s Zune Pass as a more attractive solution. Instead of 30 grand, he says, you can download as many songs as you like to your Zune for the low low price of $14.99.

What Moss doesn’t tell you, however, is that once you stop paying your monthly fee of $14.99, almost all of your downloaded content disappears – Microsoft generously lets you keep 10 downloaded songs a month.

It’s funny how Microsoft needs to resort to extreme hypotheticals in an attempt to prove a point. For starters, let’s take a look at 30,000 songs. Assuming that an average CD contains 12 songs, 30,000 songs translates to 2500 CDs. In order to purchase 2500 CDs in a year, you’d have to buy nearly 7 CDs every single day of the year. Who the hell is buying that much music?!

Also, even if we assume that some crazed music aficionado is buying music at that rate, isn’t it logical to assume that he’d be the last guy on earth who would want to rent his music?

What Microsoft’s Zune Pass really offers is a temporary benefit at the expense of long term utility. A year subscription to the service will set you back $150. At the end of your yearly subscription, you’re allowed to keep 120 songs, which averages out to $1.50 a song.  Hardly a bargain worth signing up for.

ArsTechnica also points out:

In other words, if you wanted 30,000 songs for keeps, just like the iTunes Store, you would have to wait 250 years. The cost would be a whopping $45,000, however. In other words, it’s only really worth it if you’re OK with the fact that you have to keep paying the monthly fee to keep access to the songs that you don’t yet own. Otherwise, iTunes (or any other à la carte model) is the way to go.

Every subscription based music service has failed because people ultimately want to own their music. Music is an entirely different beast that doesn’t lend itself to a renting model. Take a look at your “Top 25 Most Played” list on iTunes and see how often you’ve listen to your favorite songs. I’d guess that most people have listened to their favorite songs well over 80 times. Now find me a person who would be willing to watch the same Movie or TV episode that many times.

Now subscription based music services do have their place. If I’m headed to Costa Rica for 4 weeks, for example, it’d be nice to download 20 GB worth of songs to listen to on my journey. But by and large, and as a practical business model, a subscription based music service will never become viable in and of itself.

The fact that Microsoft feels the need to attack iTunes on price simply exemplifies that lack of confidence it has in its own hardware and software. Proclaiming, “Buy me, I’m cheap!” might be a successful way of advertising certain products, but that’s apparently all Microsoft has to say these days.

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6 Comments For This Post

  1. slappy Says:

    Trust him, he’s a FINANCIAL ANALYST. LOL

  2. Jocca Says:

    I like to own the clothes I wear. Ditto for my music selection. I suspect that the majority of people are like me in this regard. For movies however, I do not mind renting because my habit is to watch a movie once only and so rental is a reasonable way to go for this form of entertainment. Take this Microsoft and…..who ever wrote this mindless article.

  3. James Bailey Says:

    “you can download as many songs as you like to your Zune for the low low price of $14.99.”

    “A year subscription to the service will set you back $150. At the end of your yearly subscription, you’re allowed to keep 120 songs, which averages out to $1.25 a song.”

    Huh?

    14.99*12 = 179.88

    179.88/120 = 1.50 / song

  4. EdibleApple Says:

    Thanks for catching that James, we corrected the figures.

  5. Neil Anderson Says:

    The Zune Pass doesn’t work with an iPod?

  6. S1 Says:

    It is a shame your article takes such a slanted view on the Zune and Microsoft. While I do realize that you are an Apple fan boy, good articles are based on facts, not poor analysis and very poor use of assumptions.

    First and for most you should have leveled the playing field to price point. Lets use Apples average cost of .99 per song against an average cost of .99 cents a song for Zune. Now the Zune is offering 10 songs a month under the $15 a month subscription. That means if you take that into consideration, then you are only paying $5 a month extra for the “Unlimited” music selection. Now what are you getting for that $5 a month? Simple, the ability to listen to music you might never had tried and better yet, do it legally. Now using your argument of:

    “Music is an entirely different beast that doesn’t lend itself to a renting model. Take a look at your “Top 25 Most Played” list on iTunes and see how often you’ve listen to your favorite songs. I’d guess that most people have listened to their favorite songs well over 80 times.”

    And there is where the Microsoft has added value. If we compare the fact that it is on average .99 per song from either service and we are buying the same exact number of songs, then all things are equal you are spending the same exact money. But by spending $5 a month more with the Zune you get to try songs for possibly months on end before you have to decide to buy it and that helps you find your next “Favorite song” that you play 80 plus times. Can you do that with Apple? In fact let’s ask a different question. If you don’t like a song you have bought at iTunes can you get your money back? At $5 extra a month for the Zune you could try over 1000 plus new songs, and for the same $5 at Apple you get to try exactly 5 new songs. And end up with buyer’s remorse in the process.

    Microsoft is adding value, whether you will acknowledge it or not. It is a shame they are doing a piss poor job at marketing the fact that I have brought up. And it is even more criminal that Apple did not do it first. They would have shut down every legal subscription service in the world without question if they had.

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