August 30, 2004

Spinning MS’ Pending Entry Into The Online Music Biz [7:13 am]

The Microsoft spin-meisters clearly got to the Globe with this article, Battle brewing on the digital music front [pdf], which positions Apple as the purveyor of the “proprietary” system, while Microsoft’s WMA is “platform agnostic.”

Details of Microsoft’s music offering are being kept under wraps until the official launch, expected this week. But even before it comes to market, the Microsoft music store promises to set up a head-to-head battle with Apple that recalls their jousting in the personal computer business. Much of the competition will be about rival formats and which format emerges as the dominant standard.

[...] Apple uses a proprietary digital rights management system, called Fairplay, to stop people from copying songs illegally. It licenses Fairplay only to manufacturers, like Hewlett-Packard Inc., that build digital jukeboxes compatible with the iPod. The copy-protection system has been used to prevent other companies from selling music that plays on the iPod or other devices from playing iTunes music.

Most of the other music players support Windows Media Player software, which Microsoft licenses to all comers. Microsoft, which doesn’t make its own hardware, is platform-agnostic.

“There’s a genuine format war shaping up, a standards war,” Bernoff said. “Apple basically says, ‘If you want to use our system, you have to create a player very similar to ours and we will control what you can and can’t do.’ For Microsoft, it’s far more important that their format be well established than that their music store becomes a success.”

The article is right, of course, that this is a battle of formats — but it fails to point out that the Windows Media format is at least as restrictive as the Apple format, and potentially far more so. Microsoft will certainly have learned from Sony not to make their player a solely Windows Media device, but it will be interesting to see just how restrictive their DRM system is — and how it is sold.

The NYTimes’ coverage is a little more deft, Can Microsoft Stomp iTunes With a Store of Its Own?, but it’s clear that there was an effort to put the “right” color on the pending store:

“Microsoft is going to have to do something to get people’s attention,” Mr. Bernoff said.

One way Microsoft will do that is by promoting the fact that song files from its service can be played on a wide range of portable music players, in contrast to iTunes, which works only with the iPod.

In a broad marketing campaign in conjunction with the debut of the new version of Windows Media and the music service, Microsoft is using the slogan “Plays for Sure,” a not-so-veiled dig at Apple’s more proprietary approach. That follows RealNetworks’ announcement last month that it had developed technology that allows users of its online music services to download songs to iPods, a move that riled Apple and led it to threaten legal action.

Digital Music News estimates Thursday will be the opening date (update)

Later: CNet News - MSN Music: It’s really about Windows

But for all the recent attention paid to digital music services like Apple’s iTunes, analysts say Microsoft’s entry is as much about Windows as it is about selling music.

“This is strategic to Microsoft, as one piece of the overall Windows story,” Jupiter Research analyst Michael Gartenberg said. “Microsoft needs to make sure that it can showcase all of its technology appropriately, reinforcing that vehicle as an up-to-date and extraordinarily competitive offering.”

Indeed, Microsoft faces barriers in its music business that no rival shares. From antitrust worries to the need to keep its software customers happy, its business will be a continual balancing act. The decision to go ahead with the store anyway underscores just how important digital media has become to the company’s future.

Later: The Slashdot discussion continues in this vein: Microsoft to Launch Online Music Store

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