On CnnMoney.com, I read today (June 19) that "sources say" Microsoft is developing a music service and device to compete with Apple's iPod and iTunes.

It will be a pay-per-download service with an optional "all you can eat" monthly payment. It's supposed to be more user-friendly as far as finding new artists or having a music community online. I guess that's the big hook, because obviously it's not going to work with anything but WMP PlaysForSure devices.

The sources said that they already saw a prototype of the device and heard the great things about the service. They said it was impressive and gave the impression that it might have some effect on the industry.
The article claims that Microsoft has already met with music industry people to discuss a new pricing system, designed to break away from Apple's 99cent format.

Funny how this was leaked the day after Bill Gates' announcement that he will be stepping down at Microsoft.

After this was leaked, Apple shares fell and Microsoft shares rose.
Hmm...

Read the story at CnnMoney.com

If Microsoft plays ball with the music industry, then this could spell some problems for Apple because they would loose their pricing power. Jobs has held firm about iTunes pricing policy. If MS plays with the RIAA, the RIAA could tell Apple "Raise your prices to $X.YY per song or your not going to get the license".

Unfortunately, it's the consumers that are going to be the ones that loose on this deal...

The only leverage Apple would have is the sheer number of iPod owners, however iPods do wear out and if the RIAA holds their catalogs as hostage....

Yeah, that's what is scary about this. Microsoft might take the helm in the music industry, which could seriously screw other companies like Apple and Creative.

This could do one of two things: crush the sales and power of the other companies in the market, or force new innovations from these companies in an attempt to regain the market. So theoretically, if Microsoft has success with this new device/service, we could get an amazing new iPod or Zen... on the other hand, we might never see new products like that again.

Not to mention the numerous other small companies trying to cash in on the mp3 player market (and barely hanging on) like SanDisk, iRiver, Kanguru, COBY, RCA, Philips, Audiovox, etc. While these companies are currently making enough revenue off personal music players to justify remaining in the playing field, a good promotional campaign from Microsoft and good opening sales could throw them off entirely.

This is a serious problem... personally, I think Microsoft had better have a completely amazing product to warrant edging in on Apple's turf.

This post has been edited by austiniskoge: Jun 20 2006, 02:43 PM

I thought Microsoft already did something like this, MSN Music...

http://entertainment.msn.co.uk/music/

Confirmed.

Link to original article

It'll be Apple iPod v/s Creative Zen v/s Samsung Yepp v/s Microsoft Zune.

So long, MSN Music...........

I think the service discussed is called "Urge", and if you install Microsoft Media Player 11 it appears as an option by default. Personally I cannot see people flocking to use it, as the main competitor Apple's iTunes is more seasoned. Ultimately you are downloading legal music to listen to on your computer or burn to cd, and I have never liked Media players appalling inability to burn playlists with out first converting mp3s to its own proprietary format.