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Instant Music Stores?
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That's what labels do
Anyway, these music stores aren't going to work, in my opinion, because of the following:
1. iPod...everyone knows the iPod and everyone loves the iPod, even PC fanatics...Apple touts and has touted about the iPod+iTunes combination and they've had a major jump on any competition in advertising...
2. Many people, especially windows users, hate Microsoft so why give them more business?
3. Anyone who's ever encoded in WMA or heard anything encoded with WMA will automatically label these services as pure crap...
4. Who could honestly put together a store to rival Apple's? Think about it....most everyone knows about Apple's leg up on MS when it comes to digital multimedia...who would you trust with your media? Certainly not a company most notable for it's business applications....
Oh an let's not forget that even Apple itself has said that there's no profit to be had in the iTMS, the money is in the iPod...there are a few other players that could release stores that might expect to succeed but they're all big enough to start their own services, i.e. Sony, possibly BMG, WB, etc...There's no point to having multiple services and who get's paid in the end no matter what service you use? Microsoft, so why waste your time on differentiating between services? Apple has a huge jump on the market and a player that is constantly in the spotlight while every other player is returned after christmas for an iPod...I realize MS can be a loss leader to screw over Apple but you can't be a loss leader if NO ONE USES YOUR SERVICES
Actually Microsoft makes a hell of a lot of money off of Xbox....sure they lose about a hundred on every unit but the licensing gets them plenty of money from the games, i.e. you buy a few games you've evened out, buy any more and Microsoft makes profit....you rarely make money on hardware (unless you're a supplier/manufacturer), it's almost always the software....
Actually not true in many ways. First, the lose more than a hundred on every unit--the amount lost varies over time (it can be as high as $200 sometimes). Whenever it looks like Microsoft might break even on hardware, Sony lowers the price of the PS2 to bleed Microsoft a little more.
Second, the amount they lose is not made up in licensing the games. Microsoft's quarterlies show this is dramatic: their entertainment division was making a tidy profit until the XBox launched. I can't remember how many millions it lost last quarter but it was significant. Worse than the Newton was for Apple, but Microsoft is a rich monopolist so they can take it.
Third, while it is true that many vendors have, at times, broken even or lost money off of the hardware sales in a platform, currently Microsoft is the only company that loses money subsidizing hardware sales. Nintendo and Sony at the very least break even. That's why you can download Linux for the PS2 from Sony, but Microsoft engages in a copy production DMCA-induced warfare to keep Linux out of the XBox and is has stated that their move to PowerPC in the XBox 2 was partly to discourage people dropping Linux on it.
The largest mistake Microsoft made with the XBox was centering on commodity PC hardware. This allowed them to enter cheaply but they had to strong arm all the suppliers to get a decent entry price. But once they did that, the suppliers couldn't lower prices any more during the lifecycle of the product. This is evidenced by the fact that neither NVidia nor Intel are in the XBox 2. Sony, OTOH, sunk in a huge entry/design cost but it got cheaper rapidly as they could save money as the platform matured by replacing multiple chips with one multi-functional one.
Finally, the choice of using a PC hard drive was a bit premature. Any person who has worked in the embedded market knows that the hard drive has "a floor" in price and thinks twice before adding it to the Bill of Materials. This floor is way to high to compete on price with Sony and GameCube. That alone will forever leaves Microsoft with a "follow the leader" mentality as to price.
First I must clarify...when the Xbox came out MS was losing around 100 per unit....now it should be a little more obviously because the price has dropped from 300-179....though I'm sure the production cost has dropped somewhat since then as well....secondly my friend's parents are MS shareholders so I might have to check with them about the quarterlies, but are you sure their losses in the entertainment division weren't just redirected from other divisions like windows where there should be an expected drop due to IBM switching to linux on it's business machines? Also I think you mean to say that the amount they make is not in licensing games, but that's simply untrue (unless you didn't make a typo). Any video game company makes it's money on the licensing of games to run on it's machines. Each game company pays the company licensing fees to be able to sell games for certain players, the only ones that don't are the companies who own the players. For example, Rockstar games wants to sell GTA Vice City on the Xbox, they have to pay MS to be able to produce and sell GTA for the Xbox. That's where the money is made for MS. Their other revenue comes from producing their own games. Now I guess it is possible that MS is losing money on the Xbox this quarter, but that doesn't mean that MS hasn't made money on the Xbox already...I wasn't simply speaking about this particular quarter...in any case you may be right, there has been a drop off in recent sales but in general that's how things work, not to say that you don't know....Now, I don't know where Sony and Nintendo came in but I never mentioned them. However the company losing the most money is probably Nintendo (only in the home console market)....unless there's a sale I probably sell 4 or 5 Xboxen(?) and PS2s for every GameCube...and they're even $99 now!