Ah Doug Morris, unibrow baby to the digital music revolution. His hard-ball approach with Microsoft, fighting hard for a $1 cut of each Zune sold in exchange for allowing Microsoft to license Universal Music's stable of artists, won him a place on the enemies list of every music blogger from Anaheim to Zurich.
Morris' next hardware licensing target is Apple, who's current deal with Universal expires in May of this year. According to the AP, "Speculation in the industry is that he'll seek a slice of iPod sales. Apple declined comment." Morris stopped short of threatening to pull Universal's catalog from iTunes if the Cupertino kids won't cough up extortion payments royalties but, I wouldn't consider that option completely off the table.
The grapevine says some at CES are being told Microsoft will no longer develop PlaysForSure, its proprietary DRM system, a move Microsoft swore up and down it would never make when the company failed to include PlaysForSure support in the Zune line.
According to PC Pro News,"Microsoft will concentrate exclusively on its Zune platform, which is not compatible with PlaysForSure. Microsoft has neither confirmed or denied the reports, which draw on comments made by an executive for one unnamed music service and have been confirmed by others in the industry. Microsoft CEO Steve Ballmer has said that he expects PlaysForSure to continue, although he has explained that Zune was conceived because the PlaysForSure approach had failed to dent Apple's dominance of digital music."
And just when Napster was starting to show new signs of traction. It's unclear yet what all this means for the many PlaysForSure partner companies but, the end of development could put them all in a very precarious place. This could be a good thing for some, as Real Networks and Sandisk seemed to see this coming a while ago, and have created a new, competing subscription-capable DRM format.
Aw, keep trying little buckaroo! C|Net reports that the Zune hasn't cracked the top ten portable music players, although it has captured a "decent slice" of the hard drive based player market in big box retail stores.
The overall top ten is overwhelmingly Apple, with 8 of the top ten slots occupied by fruit etched media devices, Sandisk's Sansa models round out the rest of the ten. For what it's worth, Santa (also known as a stand-up comic and brit-pop trivia nutjob) recently delivered a Sansa to my doorstep, and I couldn't be happier.
Analysts are saying that Microsoft is "doing well for a newcomer" and reminding us that the Zune is a "multiyear haul" but, what is it going to take to wedge Apple out of the driver's seat and substitute a Microsoft product in its place? The Zune's marketing, though really pretty, is incredibly conceptual and artsy and, frankly, the American consumer isn't exactly known for their ability to "get" high-brow concepts. Coupled with the closed eco-system of Zune's "Marketplace", and the relative complexity of the whole Zune experience, MS has a very long way to go to win this little war they've started.
This year will see ecosystem changing digital music milestones, if Robert X. Cringely's crystal ball is working properly. In his 2007 predictions Cringely writes, "No one DRM technology emerges as the winner and the RIAA begins to back off as it loses a few legal cases. Still, no Internet-only song wins a Grammy or is even recognized as existing." He also turns his six-shooter of prognostication on Apple's unibrow baby wanna-be, "Zune 2.0 appears, isn't brown, but still nobody buys it."
Cringely's predictions give us something to think about. I've already gone on record as saying DRM is deadmeat in 2007 and, I think he's certainly within reason to believe the RIAA will eventually tire of its endless stream of litigation. What I think the RIAA won't do is end one strategy without starting another, so look for signs of a new direction in "piracy management."
Let's face it, piracy isn't going to shrivel up and die, but will be managed like a chronic disease, rather than through a frantic hacking off of limbs.
As for the Zune, I don't think it matters. Zune 2.0 or not the only thing that will displace Apple as top dog in the digital music marketplace is the end of DRM for mainstream, major label music. The death of DRM would make major changes in the hardware ecosystem possible, as manufacturers compete for eardrums and eyeballs on a level playing field. Apple's DRM has the labels stuck in a very tight place, and there is every reason to believe that deep within the darkest layers of the RIAA's war room there is a sincere desire to break free from Apple's bonds.
As for an internet only song winning a Grammy, as long as the Recording Academy members are exclusively members of the "club", I think it's safe to say that the Grammy awards won't see any internet party crashers invited to the dance. That's just simple logic.
With the holidays playing time burglar to my regular schedule of combing the web, I missed this gem which our sister Engadget jumped aboard. Linux is making its way on to the Zune, one baby step at a time. According to a forum post Mys Videl of Zune Boards has managed to build a boot-loader and compile a working Linux kernel for Microsoft's Zune, which eventually could open up a world of possibilities for the device.
Videl writes of her milestone, "The way to boot it to the Zune right now is very complicated, takes some time, and is risky if you don't know how to do it. I won't be releasing this until there is no risk to Zune users when they use Zune Linux. We are looking for graphics people who are willing to make logos [...] for Zune Linux, we also will be looking for Beta Testers when it comes to that point. "
If all the details can be reverse engineered, the Zune makes a pretty capable piece of hardware for a linux based personal media player. With the Zune's built in WiFi some not-so-Microsoft approved features could be added to the device, such as the ability to search and download music from the web anywhere a hotspot is available, or to use the Zune as a wider ranging multi-function device. Frankly with wi-fi, a fast processor, large screen and 30GB of storage space the possibilities are almost endless.
If you weigh the anecdotal evidence, Microsoft's Zune didn't have a very merry Christmas. Failing to make Amazon's top sellers list at any point during the holiday season, the Zune trailed far behind Apple's iPod, several models of which held top spots at various points.
According to TechWeb "During the holiday season, Zune was seldom seen among the top 10 consumer electronics on Amazon. Microsoft, however, says sales have met its internal forecasts, and it expects sales to pick up over time as the company increases marketing and introduces technology enhancements."
Meanwhile the iPod was holding steady at nearly 73% of DAP retail revenue and a solid 63% of unit sales during the same period. As much as Microsoft would like to pretend that the Zune is everything they'd hoped it would be, you have to imagine that somewhere in Redmond a few execs are sitting around a white-board re-evaluating the Zune strategy.
Is it just me or have we entered bizarro world? Bill Gates (yes, that Bill Gates) says he's unhappy with the current state of DRM.
TechCrunch writes, "Gates said that no one is satisfied with the current state of DRM, which "causes too much pain for legitmate buyers" while trying to distinguish between legal and illegal uses. He says no one has done it right, yet. There are "huge problems" with DRM, he says, and "we need more flexible models, such as the ability to "buy an artist out for life" (not sure what he means). He also criticized DRM schemes that try to install intelligence in each copy so that it is device specific."
That's all great Billy but, we should remind you that PlaysForSure doesn't exactly fit the model of DRM bliss, and the Zune's proprietary DRM model is certainly not the way to go. Pretending to be the friend of the anti-DRM lobby and encouraging people to rip CDs is all well and good but, can you maybe spend just a small part of your 200 development and research budget actually backing up what you're spouting during press events?
This totally cute new Zune ad does an admirable job of explaining the concept behind sharing music. Ok, so, the cookie doesn't lock itself from use after 3 days or 3 plays but, the idea presented is pretty noble.
Those early Zune sales numbers are slipping into less-than-average territory, having dropped to 5th overall behind Apple, Creative, Sandisk and even also-ran Memorex.
Bloomeberg reports, "Zune's market share declined as SanDisk Corp. boosted sales with a 50 percent price cut on its media players, taking a 39.3 percent share and knocking Microsoft from the No. 2 spot it occupied in its first week in the market. Redmond, Washington- based Microsoft sold about the same number of units as the previous week, failing to keep pace with rising holiday sales."
All in all it appears as if the Zune will find its way under far fewer Christmas trees than Microsoft had once hoped. Microsoft's PR machine is still hopeful however, predicting 1 million units sold by mid 2007 in recent reports.
Steven Levy, author of "The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness" is on Boing Boing's "Get Illuminated" podcast in the most recent episode.
Levy talks about Steve Jobs and the creation of the iPod (something he's researched to a level unmatched), the Zune and why it's a lousy device and, what the inevitable iPhone could be.
It's a worthwhile listen. Levy is a brilliant and articulate guy who practically burries himself in technology.
When UMG forced Microsoft's hand and extorted gained a deal to get $1 per Zune sold as compensation for what UMG CEO Doug Morris calls "a repository for stolen music", it became a widely held belief that UMG beat Microsoft at the negotiating table. Microsoft, just days away from the Zune's launch _needed_ UMG's extensive catalog -- which includes labels and imprints such as Def Jam, Geffen, Interscope and Verve -- for the Zune Marketplace.
ZDNet's Jason O'Grady offers a different idea, "Why in the world would Microsoft agree to such a dangerous precedent? The obvious reason is that MS needed to get access to the Universal catalog. My favorite (and more dastardly) reason comes from Macalope who claims that Microsoft did it "to try to screw up Apple's business model.""
We're watching the beginning of a slippery slope. UMG won't be the last label to demand a royalty on hardware, and now that the precident has been set, Apple may be UMG's next target. Graver still, O'Grady posits that the movie studio's will be next, and offers evidence that they are already warming up to demand tighter DRM restrictions on movies bought from the iTunes store. How far will UMG go and, what that means for device manufacturers is still up in the air but, recent statements by UMG's CEO show that he's ripe and ready for battle.
Rockbox, an open-source firmware package which aims to provide an open alternative to the closed firmware of iPods and other portable media devices could be coming to a Zune near you, maybe.
Brad Linder writes, for our sister blog Download Squad, "Of course, installing Rockbox on a Zune would probably mean you couldn't play music purchased from the Zune Marketplace, and would definitely mean voiding your warranty. And odds are you wouldn't be able to share files with other Zune users via Wi-Fi (but who really does that anyway). On the other hand, this could be the first step towards using the Wi-Fi for something useful, like web browsing."
There are many hurdles however, with the similarity of the Zune and the Toshiba Gigabeat S, and the fact that a Gigabeat version of Rockbox is already under development, it could be argued that the effort required would be minimal when weighed against the abilities gained. A 30GB hard drive, 3 inch bright screen and wi-fi could make a really interesting platform for further development when done away from the Redmond campus.
Alas, there is no official word that the Rockbox team is working in this direction but, a boy can dream. At least DRM hasn't taken that away, yet.
The always insightful and often controversial David Chartier has been doing some thinking lately, "about the more significant aspects of the Zune, such as what it means (and could mean) to the market and the culture of the industry."
What Chartier has come up with is a six-point plan to fix Zune for its second roll-out. I'll let you read his detailed explanations at our sister blog TUAW but, his points make total sense:
Share music, sans the bombing (Can't cliques of users share music for keeps?)
Respect everyone's intellectual property (Fix the 3x3 implementation for CC licensed works)
Fess up and open your store's doors (Quit freezing out the PlaysForSure partners)
Stop treating store customers like idiots (The credit system is asinine)
Hire a marketing team that doesn't suck (Squirting? Marketing to 18-25 exclusively? Why?)
Go big or go home (You can't beat Apple without rock solid usability)
It's good advice for anyone trying to take over an existing market, and Microsoft would do well to heed Chartier's words for next time around.
USAToday reports on Zune's first few weeks out the starting gate and according to analists they interviewed, it's not all bad. Microsoft claimed 9% market share of the portable media devices sold since the Zune launch, compared with 63% for Apple and just 8% for Sandisk.
"For a new brand that received limited to mixed reviews, and which is incompatible with the leading music store (Apple's iTunes,) as well as other music stores, it was a good launch," which is the retail equivalent of saying, "Other than that little incident Mrs. Lincoln, the play wasn't half bad."
The NPD Group analisys USA Today spoke with aren't affraid for Apple as a result of the Zune, and the numbers above bare that out. If anything, Microsoft's Zune may have more impact on Sandisk, given that the cost difference between Sandisk's top-of-the-line Sansa e280 -- a flash based 8gb player -- isn't much when compared with the 30GB hard drive based Zune.
Ah Doug Morris, unibrow baby to the digital music revolution. His hard-ball approach with Microsoft, fighting hard for a $1 cut of each Zune sold in exchange for allowing Microsoft to license Universal Music's stable of artists, won him a place on the enemies list of every music blogger from Anaheim to Zurich. 
The grapevine says some at CES are being told Microsoft will no longer develop PlaysForSure, its proprietary DRM system, a move Microsoft swore up and down it would never make when the company failed to include PlaysForSure support in the Zune line. 
Aw, keep trying little buckaroo! 
This year will see ecosystem changing digital music milestones, if Robert X. Cringely's crystal ball is working properly. In his 2007 predictions Cringely writes, "No one DRM technology emerges as the winner and the RIAA begins to back off as it loses a few legal cases. Still, no Internet-only song wins a Grammy or is even recognized as existing." He also turns his six-shooter of prognostication on Apple's unibrow baby wanna-be, "Zune 2.0 appears, isn't brown, but still nobody buys it."
If you weigh the anecdotal evidence, Microsoft's Zune didn't have a very merry Christmas. Failing to make Amazon's top sellers list at any point during the holiday season, the Zune trailed far behind Apple's iPod, several models of which held top spots at various points. 
Is it just me or have we entered bizarro world? Bill Gates (yes, 
Steven Levy, author of "The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness" is on Boing Boing's "Get Illuminated" podcast in the 
The always insightful and often controversial 
