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Microsoft Prepares Online Music Store
by Arie Slob
Hello Windows users,
Microsoft is preparing to enter the crowded marketplace for legal online music services, with the introduction of a song-downloading service next year. The product will be competing with offers from Apple Computer, BuyMusic.com, MusicMatch, Napster, RealNetworks and others.
Without giving many details, a Microsoft spokeswoman confirmed that Microsoft's MSN Web site will offer a download music service. More details are expected at a later time.
The market is divided into three types of digital-music services: digital-music streaming services such as RealNetworks' RHAPSODY service, digital-music download services such as Apple's iTunes Music Store, and services that offer both features, such as Napster.
While Microsoft has not revealed its plan as to which service type they will choose, it could well be the "mixed" service. Microsoft already operates a music service in the UK called MSN Music Club, which offers both streams & digital downloads. Downloads are sub-divided in "Temporary" and "Permanent" downloads. The difference is that a temporary download can only be listened to from your computer, and a permanent download can be burned to CD and/or played on another device.
It seems likely that the UK service could well be the model for the US. In the UK, both a monthly subscription as a "Pay As You Go" option is available. The system works with "credits". For example, £1.49 (roughly $2.54) would get you 150 credits, good for 1 permanent download, up to 15 temporary downloads, or 150 streams.
Apple charges $0.99 for each downloaded song (and is reported to lose money hand over fist), so I'd expect to see pricing in the US at a competitive level. After all, Microsoft is sitting on a cash horde of some $50 billion, so it could take some losses until it perfects its system (and becomes market leader?).
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22 Nov. 2003, Vol 6 No. 39
