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Is MS Following in Apple's Footsteps?
By Eric de Fontenay (Founder & Publisher)
(more articles from this author)
2003-05-22
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So it's not all ad news after all as Apple reported having toped the 2M mark of songs purchased & downloaded from its iTunes Music Store. Apple's unparalleled success has led to a slew of discussion on the computer industry muscling into music... and what about Microsoft?

This was the question emailed to me by Burkhard Reitz, Publisher of the German-based Der Kontakter (www.kontakter.de), who noted that "when there is a market for something Internet-Business related, Microsoft makes a grab at it. I cannot imagine that they won't [start a similar service as Apple]."

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My reply was a clear NO: "Microsoft's primary Achille's Heel in replicating Apple's success is the fear of alienating everyone else in the industry, from film and music to traditional/online retailers, etc... all of whom have bet heavily on its Windows Media technology. To some extent, while Apple has just initiated its move into the consumer music market, Microsoft has long been at work to dominate the B2B side of the business as the underlying technology provider.

"Nor do I believe that Microsoft will be 'tempted' into the Apple model. It could have justified entering the PC hardware market long ago but has consciously opted for a 'wholesale' model where PC manufacturers (Microsoft's retailers) use various ways to push their hardware, and consequently Microsoft software products. Microsoft is of course not alone to forego vertical integration as the model, which has also been strictly followed by Intel - two collaborative monopolies (Wintel) which form the underpinning for a competitive PC market.

"Definitely MSN is a consumer portal, for whom music will only be one and probably not the most lucrative product. And their move in the mobile market has exactly proven my point as major mobile manufacturers are promoting a competing platform to prevent MS from leveraging its monopoly over their market. In then end, I believe that MS will always view licenses from its WM technology more lucrative than 99 tracks."

Sounds logical, right? Seems to make a lot of sense, no? Well someone should tell Bill Gates that as he will unveil MSN's Radio Plus service, the first in the web portal's gambit to monetize content. "I can't go into details, but this is the first of an array of offerings that we hope to deliver in the subscription space--not just in entertainment, but across the board there will be more subscription services," Lisa Gurry, Microsoft's group product manager for MSN, told CNET.

Of course the move places it more in competition with other radio subscription services such as RealNetworks' RealOne RadioPass and Yahoo's Launchcast Plus than actual music retailing à la Apple. Maybe Burkhard was right all along in concluding "that the change from a company that sells B2B-products as the "underlying technology provider" to a consumer-brand has already begun." Whodathought?

Related News from Mi2N:
» ITunes Music Store Tops Two Million Song Downloads


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