Microsoft Music Store in 2004?

[jmerk]

microsoft will EVENTUALLY win (as always)

B]"The might be wrong, they might be slow, they might be stupid, but they have inertia. All they have to do is plop down in a market and refuse to move and they'll eventually own it.

Netscape had 95% market share, and now look at them.

MS was late in the PDA market-- Palm owned it without a question. CE failed for years. Now look at it."[/B]

I have been making this very argument on other boards. As you have conveniently pointed out, their business model is this:

"See what is emerging as a success, copy it, make a "good enough", uninspired product, make it cheaper and take a loss, leverage the monopoly and slowly bleed the competition to death."

You mentioned how this worked in browsers, you mentioned how it is working in handhelds, I would go one step further in asserting that this model is currently in progress in the console gaming market.

Dreamcast-dead. GameCube-dying. Playstation 2-market leader. XBox enters market-at a large loss. My prediction for 2004-2005. Nintendo stops making console gamestations and starts developing game titles for Playstation 2 and XBox. XBox moves up to at least 50% market share...Playstation slowly bleeds to death and becomes niche player.

Musicmatch-dead in the water. BuyMusic-dead in the water. Pressplay-dead in the water. Napster-dying. iTunes-market leader. Windows Media Player enters market with Windows Media Player Device at a large loss. WMP and Device are cheaper, bundled, and default. Apple/Jobs indignantly insists iTunes/iPod "better" and does not lower price to compete.-iTunes/iPod slowly bleeds to death and becomes niche player.

Sound familiar? If not, please reference desktop computing circa 1977-present.

I hope I am wrong and this time Apple/Jobs does it right and the superior product wins...here's hoping...

j

 

[Fukui]

Re: Re: This time, I think MS is too late

Originally posted by Analog Kid
Microsoft is never too late... They're like the government. The might be wrong, they might be slow, they might be stupid, but they have inertia. All they have to do is plop down in a market and refuse to move and they'll eventually own it.

MS was way late into the Web. They used to come into the Media Lab and talk about how misguided everyone was to be focusing on the Internet as a force in computing. Netscape had 95% market share, and now look at them.

MS was late in the PDA market-- Palm owned it without a question. CE failed for years. Now look at it.

Heck, MS was late getting into the GUI game...

No, MS is never late. Especially given the fact that everyone but iTMS has foolishly chosen the MS audio format-- all those users will eventually get lazy and just consolidate their libraries with whatever MS has bundled, or more likely get tired of having to redefine their default player and and having to reorganize their music libraries with each upgrade.

It's not about making money on this venture for them, it's about not losing in an emerging market. I don't think MSN has made money yet, but they're not pulling the plug and conceding the market.

You beat me to it.
Its more about reinforcing the Windows Monopoly than anything else.
Apple is getting thier foot in the door, and of course, MS doesn't like it.
Windows is thier playground, not Apples'

 

[LethalWolfe]

Re: Re: Re: This time, I think MS is too late

Originally posted by Fukui
You beat me to it.
Its more about reinforcing the Windows Monopoly than anything else.
Apple is getting thier foot in the door, and of course, MS doesn't like it.
Windows is thier playground, not Apples'

You beat me to saying "you beat me to it."


And just as a FYI to the people bringing up the Xboxes being sold at a loss. All consoles are sold at a loss. The money is in the games and the accessories and/or services (i.e. Xbox live).


Lethal

 

[SiliconAddict]

Re: They say it will be available through the MSN website...>

Originally posted by scat999999
I wonder if that means you'd have to be an MSN user to access it? It may not necessarily be iTunes they are targeting, but using it as a way to pull customers from AOL, Earthlink and other ISPs to grow their MSN service. MSN is monthly income coming in. Gates and MS are all about revenue.

Nope. Most likely http://www.msn.com which every browser in windows defaults to. Did I mention yet how much I hate that company?

 

[SiliconAddict]

Re: Re: Re: Re: This time, I think MS is too late

Originally posted by LethalWolfe
You beat me to saying "you beat me to it."


And just as a FYI to the people bringing up the Xboxes being sold at a loss. All consoles are sold at a loss. The money is in the games and the accessories and/or services (i.e. Xbox live).
Lethal

Ya all gaming companies take a loss and from what I understands its anywhere from $100-$200 but I've heard MS isn't taking a small hit on these boxes. I'm hearing in the range of $300+ on each system. Granted that was when it was first released but still. MS can afford to play these games and kill off the competition. If it wasn't for their whore cash reserve that they have MS would have never won the browser war, never bothered with PDA's, never even looked at the gaming industry.
Heck does anyone know how much $$$$$ MS shells out for free software? I'd love to know. Anytime MS hosts an event such as MS Xtreme, or Pocket PC mobile tour, etc they are giving *** loads of software away. I was amazed at walking away with several thousand dollars, relatively speaking since MS overprices their **** to begin with, of software. If I've said it once I've said it 1,000 times. Microsoft is a marketing company that just happens to make software.

 

[the_mole1314]

I really can't see M$ selling songs at a loss like iTunes. I really think that prices will be the same or more, I doubt we'll see $.49 a song. Unlike iTunes, M$ isn't selling another device that'll make up the losses. Plus, I think that the new serive could very well be against the anti-trust agreement M$ made with the government. I think that M$ is won't win this, they've dropped the ball, even early 2004 is too late. Buy.com came shortly after amazon.com, but they are failing, even though they came out and had lower prices, and other things. With AOL, Pepsi, and possably McDs, Apple has inserted themselves firmly into the music market, and I doubt that M$ will be able to break that. I still say that Palm OS is the dominant force in the PDA market, with most new PDA/phones using it along with the cheapest PDAs. Even M$'s usual buddies at Dell and Gateway arn't using M$ for their MP3 operating systems.

Another problem is that they're selling them through the browser, so they'll face the same buymusic.com problems of licensing and technical problems.

 

[SiliconAddict]

Microsoft CTO touts BlackBerry, iPod

Microsoft's chief technology officer touted the Blackberry e-mail device and Apple Computer's iPod in front of an audience of information technology directors and developers.

In addition to owning a Blackberry and loving the iPod, David Vaskevitch said he always carries a digital camera. But he didn't mention using one of Microsoft's own Pocket PC devices.

Vaskevitch, who reports directly to company Chairman Bill Gates and is responsible for developing a strategy and architecture for future Microsoft platforms, was speaking for a discussion panel on wireless devices at the Salesforce.com user and developer conference in San Francisco on Tuesday. According to Vaskevitch, he carries an Apple iPod, Research in Motion's BlackBerry device and a digital camera when traveling, because each device is tailored to a specific job and does that job very well.

Someone apparently forgot to tell this guy that Apple was the enemy. What next G5's at Redmond???.....oh wait......

 

[mrsebastian]

typical m$. apple does it first, does it right and then m$ re-creates a cheap version to sell to the masses.

 

[jettredmont]

Originally posted by the_mole1314
Just trying to drop clues and info without going all out. Read what I've said and you can piece it together. If you don't want me to speak, then fine.

Unless you enjoy the intrigue aspect of it, I'm sure Apple Legal can piece things together faster than most other readers of this board ... so, you can be all cloak-and-dagger and then get sued without many people knowing what you're talking about, or you can be open about it and everyone will know what you're talking about while Apple sues you. Or you can be quiet or at least more subtle in your "leaking".

For myself, I know what you're talking about (a cheap iPod this Christmas, as you've said previously). It's silly playing naive here ...

 

[JoE950]

i dont understand this cheap iPod thing.. MP3 players before the hd, seemed usless to me. i freaking carried around my powerbook for a while and used it as an mp3 player because it held all my music untill the iPod came out. it just seems pointless to:
A] settle for a low amount of storage when cds still hold more for less$$ and are faster at burning then transferring to a cheap slow flash card
or B] buy a bunch of expensive fast memory sticks just to have some small player that ends up costing as much as a low end iPod

nobody even mentions the fact that you can get iPods for REALLY cheap used. especially since everyones trying to sell their old ones to upgrade to new ones. you cant argue that a 32 megabyte player is worth 100 bucks when you can get an mp3 reading cd player for that and 50 disks... im finished

 

[Kid Red]

Let's clear some issues up for those who seem confused-

1) Music downloads don't make a lot of profit

2)ITMS is solely for the purpose of selling more iPods, so it's more a feature then cash crop

3)MS won't make any (much) money off this no matter how good (haha) it is

4)There is no music service competition for Apple because ITMS is to sell iPods not compete for people's downloading-mp3-cash.

So who cares if there is 30 music download services, as long as Apple sells the iPod, promotes the iPod and updates iTunes, Apple will be OK.

The iPod is the key and no other company has anything close.

 

[Kid Red]

Originally posted by the_mole1314
I really can't see M$ selling songs at a loss like iTunes. I really think that prices will be the same or more, I doubt we'll see $.49 a song.

Apple isn't selling the songs at a loss, they make like 10-20¢ a song IIRC. They made like 50 million since ITMS went live I believe.

 

[SiliconAddict]

Originally posted by Kid Red
Apple isn't selling the songs at a loss, they make like 10-20¢ a song IIRC. They made like 50 million since ITMS went live I believe.

Minus the process of cutting and preping audio tracks and adding them to the dbase, minus servers, minus data backups, minus bandwidth, minus site costs to hold all these servers, minus AC to cool said servers....etc....etc...etc.
It takes money to make money. The question I have is how much after the tab has been settled does Apple make off of iTMS?

 

[JoE950]

Originally posted by Kid Red
Apple isn't selling the songs at a loss, they make like 10-20¢ a song IIRC. They made like 50 million since ITMS went live I believe.

they dont consider that making money.. it costs them money run the service and most of that 50 million is going directly to keeping it going and well advertised. steve said they hope to just break even while stating the 50 million earned.

 

[Awimoway]

Re: Two things

Originally posted by Hawthorne
2. Anyone want to place bets that installation/use of the Micro$oft Music Store will "accidentally" break the functionality of Napster, MusicMatch, and iTunes?

For that matter, the Service Pack Release of the Day® will probably break them as soon as Windows music store is released.

 

[asphalt-proof]

I worry about Microsoft in the realm. They have proven before that they do not fear the US gov't when it comes to anti-trust issues. I can't think of any major computing market that they have gone after and failed to achieve market share. (feel free to correct me). Yes, it's not about the money... Apple says that downloads are a losslead. But it is about the future of where the music industry will go. Someday dowloads may not be a loss leader. Does Apple want to be left behind when it had the lead all to istself once? THis really is the browser wars all over again and everybody knows it... that's why all these companies want on the wagon. THink of the money involved if your company is the major (think 70-80% ) of all music sales... not just CD's. Everything. Pretty soon you can tell the content people how much THEY will give Microsoft to sell their stuff.
I believe that Microsoft is the leader in this market despite the the popularity of iTunes and the iPod and the reason is that Microsoft can throw as much money as they want to get the marketshare. Imagine buying a computer, opening up your internet browser and finding you MSN portal telling you to sign up for Passport and the MSN account and getting 100 freedown loads. Who cares if the interface is crappy... hey its all free! This explains why IE is the most popular browser, why Windows is so ubiquitous etc. Once again, Microsoft has never failed to dominate a market they put all their resources into. I want Apple to kick their butts so bad in this area. And I really think that it could take Microsoft down a peg or two in the process. But I worry that Microsoft will buy their way into the clueless hearts of the uncaring masses and make Apple that much more irrelevant. Be afraid. Be very afraid.

 

[Kid Red]

Originally posted by JoE950
they dont consider that making money.. it costs them money run the service and most of that 50 million is going directly to keeping it going and well advertised. steve said they hope to just break even while stating the 50 million earned.

Exactly, my reply was separate from my first post. ITMS is only around to sell iPods and is not here to make money. Therefore, any competition is pretty much throwing money away. However, Apple isn't running iTunes at a loss tho, just not at a big profit either.

 

[ITR 81]

Re: microsoft will EVENTUALLY win (as always)

Originally posted by jmerk
B]"The might be wrong, they might be slow, they might be stupid, but they have inertia. All they have to do is plop down in a market and refuse to move and they'll eventually own it.

Netscape had 95% market share, and now look at them.

MS was late in the PDA market-- Palm owned it without a question. CE failed for years. Now look at it."

I have been making this very argument on other boards. As you have conveniently pointed out, their business model is this:

"See what is emerging as a success, copy it, make a "good enough", uninspired product, make it cheaper and take a loss, leverage the monopoly and slowly bleed the competition to death."

You mentioned how this worked in browsers, you mentioned how it is working in handhelds, I would go one step further in asserting that this model is currently in progress in the console gaming market.

Dreamcast-dead. GameCube-dying. Playstation 2-market leader. XBox enters market-at a large loss. My prediction for 2004-2005. Nintendo stops making console gamestations and starts developing game titles for Playstation 2 and XBox. XBox moves up to at least 50% market share...Playstation slowly bleeds to death and becomes niche player.

Musicmatch-dead in the water. BuyMusic-dead in the water. Pressplay-dead in the water. Napster-dying. iTunes-market leader. Windows Media Player enters market with Windows Media Player Device at a large loss. WMP and Device are cheaper, bundled, and default. Apple/Jobs indignantly insists iTunes/iPod "better" and does not lower price to compete.-iTunes/iPod slowly bleeds to death and becomes niche player.

Sound familiar? If not, please reference desktop computing circa 1977-present.

I hope I am wrong and this time Apple/Jobs does it right and the superior product wins...here's hoping...

j [/B]

Firstly, the GameCube is not dying and I'm not sure why anyone would think so. Last I checked they had over 300+ games which is alot more then the Xbox. Nintendo actually made money off it's console and when they dropped the price which is sure sign that new console is coming they took overall sales outselling both the Xbox and PS2. The only thing that keeps folks on board with Sony is it's huge PSONE lib. if not for that I doubt they would had alot folks buy PS2. Also as for Nintendo to be dying I doubt it as they are coming out with new console next yr that will play all reg cube games and will be out over a yr before the Xbox and PS2 future console hits the market.
I believe in this move Nintendo will start to pull in marketshare for it's self. In Japan the Xbox has always been distant 3rd place marketshare holder.

As for Apple this looks like deal only for MSN sub. base. I don't think they will win any share of earthlink or aol customers away as both those ISP's have biggest sub. base. MS might put MSN on all new PC's but how many folks actually use MSN if only to get online for the first time? Most folks go Earthlink, AOL or local ISP. I only see a MS store as being a marketing tool to pull users their way..but I doubt that will happen. If Earthlink decides to jump on the iTunes bandwagon I don't see MS stopping iTunes anytime soon.

 

[ryaxnb]

Re: Re: Re: Microsoft Music Store in 2004?

Originally posted by stoid
Does anyone have numbers on the latest market shares? Has good ol' Napster that's not Napster been "gaining public knowledge and slowly stealing iTunes market share?"

It would be great to get an update as to how iTMS is faring on the dark side.


(just noticed: the built-in speller checker doesn't like Napster, or BuyMusic, but it has no problem with iTMS. )

Yes. *Scrounges for the numbers*

 

[SiliconAddict]

Re: Re: microsoft will EVENTUALLY win (as always)

Originally posted by ITR 81

As for Apple this looks like deal only for MSN sub. base. I don't think they will win any share of earthlink or aol customers away as both those ISP's have biggest sub. base. MS might put MSN on all new PC's but how many folks actually use MSN if only to get online for the first time? Most folks go Earthlink, AOL or local ISP. I only see a MS store as being a marketing tool to pull users their way..but I doubt that will happen. If Earthlink decides to jump on the iTunes bandwagon I don't see MS stopping iTunes anytime soon.

*sighs* Why do I even bother.

Reread the news item that says

service through its MSN Web site.

Not the MSN service.

 

[Analog Kid]

Originally posted by greenstork
I was just about to say something like this. this battle will be about codecs. If MS can get the RIAA to think AAC is bad, they will have gained an enormous leg up.

That said, I just don't understand the move. Microsoft is entering a loss leader market with no hardware to compensate for insignificant profit from online music sales.

There must be something up their sleeve, you can bet they'll be doing something in the home media domain that we haven't heard about yet.

Windows Media Center. We've heard about it...

 

[savar]

Originally posted by stoid
I'm guessing you meant 49¢

Anyway, good point, as I said, like the XBox, a product sold at loss value to gain a market share.

Maybe I'm naive, but selling products at a loss in order to beat out the competition is *Very* illegal.

XBox is different--all console manufacturers lose money at least for the first year or so of production, but recoup expenses on licensing fees, SDKs, developer support, etc.

Just like Apple is hardly making a profit on iTMS, yet they can point to iPod sales and say "hey we're making money on this" which is a legal defense.

If you can show, economically, that you're not intentionally operating at a loss, then its not considered anti-competitive.

A few years back, however, Target got slammed for selling a number of products *below cost* and could not explain how that was economically feasible, except to mumble "we're burning through our bank account" and they were stopped and fined.

Of course, I'm sure others here will point to more cases where the opposite has happened--and I am fully aware of the DoJ's blunderings with MS's obvious monopolistic practices for the last 8 years now--however, I really believe that they will not be able to drastically undercut other music services. I'm guesing they sell at .90 to .95 cents a song, if not 99.

Apple, frankly, is the only service that I can see turning much of a profit, because its the only service with iPod, which is not only a best seller, but also an extremely high margin product. Apple makes around $175 on the top model units! By contrast, they makes a few pennies per song after covering overhead. (~.35 gross profit). iTMS is only projected to bring in about 50 mil this year.

Humbly yours..

 

[Sheebahawk]

have faith

in apple jobs and ipod. I still haven't bought my ipod yet, but I plan to soon. I don't know anyone that would want another mp3 player over the pod. Ipod works great with itunes, it syncs great with itunes, and it syncs better than anything most pc users have had experiance with. selling wma formatted songs through their ****ty website will not ehance any windows users computer experiane, other than offering already available services on yet, another website, possibly their start page. If this worries you then floss your ipods. Make everyone envious of it, and mock people who use anything less. be a smug elitist apple using snob. I've oly seen apple improve their situation year after year, and this trend looks to me like it will ontinue. The "masses" are starting to recognize quality.

as for Xbox, microsoft has every right to dominate the video game market. They offer the biggest, baddest machine, with the best games and online playig experiance. The machine's quality is crap, but maybe the next xbox will be better having ibm and ati hardware. If apple really cared about video games, they would still be in the market, or they would have purchased Bungie years ago. apples been snoozing and lost out, but i'm certain there won't be any snoozing when it comes to the ipod.

 

[the_mole1314]

Re: Re: Re: Re: Microsoft Music Store in 2004?

Originally posted by ryaxnb
Yes. *Scrounges for the numbers*

I doubt that that's an accurate representation, since Apple has been promoting their service THROUGH apple.com/itunes not download.com, while Napster relies mostly on download.com.

 

[tazznb]

You guys really need to understand how evil

Microsoft is. They will sell music online for 49 cents, and let Apple's service whither away; people are too stupid, and will choose freeware music instead of what works best. Sure M$ will be sued, and taken to court, but not be dealt with properly.

Even if they were punished the way they should be it would be much too late for the competition ( Netscape ring a bell?).