Microsoft Connects the Dots with Zune HD, Zune Marketplace, and Xbox

This week Microsoft took the wraps off the next Zune, dubbed
Zune HD
.  It seems to be your basic next-generation touch screen only
media player with the common additions of WiFi and an web browser (IE based). 
There are some other interesting parts such as a HD Radio tuner, an OLED
screen, multitouch, and even HD output at 720p via a dock.

The most interesting part of the announcement is not the
device, but rather the service.  The Zune Marketplace will now integrate
with the Xbox LIVE Marketplace, finally drawing a realistic picture of
Microsoft’s “3 screen” vision of the future. Getting the most press is the HD Radio tuner, the non-HD
resolution of the OLED screen, and the concept of Microsoft competing with the
iPod touch.

HD Radio tuner doesn’t do much for me, it will give people a
chance to explore something they likely have never heard of before, and
apparently the FM radio tuner has been a big selling point among existing Zune
buyers.  The resolution on the OLED screen is only 480×272, which many
have noted is not even close to HD.  I’m not really sure why people think
they need 1080p on a portable player, the lower resolution screen likely
benefits the majority of people who put low-bitrate and resolution content on
the device in the first place.  If you have HD content, the dock now
outputs 720p over HDMI.  The big question
in terms of resolution is actually what codec’s and resolutions it supports
syncing.  If it supports all popular
codecs and HD resolutions, that means I can sync without transcoding.

I have never seen the Zune as a good competitor to the iPod,
I don’t feel much different about this one.  Microsoft is still playing
catch-up here by connecting their services.  This is something Apple has
mostly had for years.  Within the next 2-3 years I can finally see the
landscape start to change a bit, but Microsoft is going to have a very hard
time going after Apple when you compare numbers.

Lacking is any mention of Media Center, which wasn’t a shock
to me personally.  I firmly believe Microsoft has moved on from what most
reading this wanted Media Center to be, and of course for years I’ve said the
Xbox was the real competition to Media Center (this will become much clearer as
we go on).  Connecting the Xbox, Zune, and Windows finally makes all of
the products marketable.  Microsoft also
just announced that Xbox
360 has sold 30 million units and has 20 million on Xbox LIVE

A few have noted that all the details have not been released
and that Media Center integration could still be there.  I don’t
anticipate it, but would welcome it.  I doubt we will see this act as a
Media Center Extender as many have wanted.  If Microsoft could of improved
anywhere in the Zune-Media Center connection I hope it was with syncing
content, mainly TV.  The Zune does support syncing TV, but it doesn’t
support anything copy protected (CableCARD, likely any future premium Cable/Sat
services), and also doesn’t support syncing content with Dolby Digital audio. 
If this stays true just about the only TV content the Zune can sync (in the US)
will be analog cable/satellite captures.  Even OTA content will be purely
Dolby Digital next months, so even your favorite local channels will not sync
unless Microsoft decides to change.

Xbox 360 Sees Record Growth in 2009

Year-over-year growth jumps as Xbox 360 console sales hit 30
million globally and Xbox LIVE community reaches 20 million users.

REDMOND, Wash. — May 28, 2009 — Microsoft Corp.
announced today that sales of Xbox 360 consoles have passed the 30 million mark
globally, with its Xbox LIVE community swelling to more than 20 million active
members. After the biggest year in its history in 2008, Xbox 360 achieved the
highest percentage growth in hardware sales of any console so far in 2009, up
28 percent over the previous year.1

The success of the platform can be measured across the
business, with Xbox LIVE now considered the world’s largest global
entertainment network. Increasing consumer desire to connect with friends,
download and enjoy blockbuster movies and TV shows, and extend the life of
their favorite games has been the primary driver behind the growth of Xbox LIVE
membership and the reason Xbox continues to expand offerings on the platform.

“We’ve always been confident that Xbox 360 offers more
entertainment value than any other console on the market, and these latest
numbers show that consumers agree,” said Don Mattrick, senior vice president of
the Interactive Entertainment Business at Microsoft. “We expect our growth to
continue to accelerate. Our news at E3 next week will underscore our commitment
to bringing blockbuster entertainment experiences to everyone and to growing
the Xbox entertainment brand globally.”

Over the course of this console generation, U.S. consumers
alone have spent $14.5 billion across all categories on Xbox 360 at retail.1
This number reflects strong interest in a comprehensive entertainment offering
that includes the ability to connect with others socially and to digitally
download entertainment, be it games, TV shows or movies. To date, consumers
have downloaded nearly 1 billion pieces of gaming and entertainment content
from Xbox LIVE Marketplace, including a broad array of premium high- and
standard-definition movies and TV shows from top studios and networks around
the world.2

In addition, Xbox 360 continues to be the platform of choice
for the industry’s top games, generating $5.9 billion in sales to date at U.S.
retail for third-party publishers, which is more than those of
current-generation consoles combined.1 Xbox 360 also leads
current-generation consoles in game purchases, with consumers owning an average
of 8.3 titles each.1

Activity on Xbox LIVE, the industry-leading online gaming
and entertainment service, surged following the launch of the New Xbox
Experience in November 2008. Since that time, the community has recorded a 136
percent increase in new members, TV and movie downloads have more than doubled,
and purchases of games, Game Add-ons and more on Xbox LIVE Arcade have
increased by 70 percent.2 Xbox LIVE reaches 26 countries worldwide
and is now in more homes than any satellite television provider.2
Before the end of the year, the number of Xbox LIVE members will surpass the
number of subscribers to the largest cable provider.1 Consumers can
expect more exciting announcements from Microsoft next week as Xbox 360 kicks
off the Electronic Entertainment Expo (E3), the world’s premier trade show for
computer and video games and related products, with its press briefing on
Monday, June 1, in Los Angeles.

About Xbox 360

Xbox 360 is a premier video game and entertainment system.
It is home to the best and broadest games plus more entertainment than any
other device connected to the TV. The digital center of the living room, Xbox
360 blends unbeatable content, including personal pictures and music, with a
unified online social network to create a limitless entertainment experience
that can be shared at home or across the globe. More information can be found
online at

About Xbox LIVE

Xbox LIVE is the most comprehensive gaming and entertainment
network connected to your television, delivering the largest movie, TV music
and gaming library on a single device, and instant access to select movies and
TV shows.

With an active community of more than 20 million people
across 26 countries, Xbox LIVE brings friends together — from the same living
room or around the globe — to share the best in home entertainment. With an
Xbox LIVE Gold Membership, enjoy exclusive benefits and premium access to
movies, music, TV and games from the top studios and services, all in one
place. More information can be found online at

Microsoft Announces the Expansion of the Zune Entertainment Service to New Platform and Markets; Confirms New Zune HD Portable Media Player

Premium Zune digital entertainment service to be available
internationally on Xbox LIVE.

REDMOND, Wash. — May 26, 2009 — Microsoft Corp. today
announced the evolution of Zune, the company’s end-to-end music and
entertainment service, to a new platform and new markets. Zune will extend its
video service to Xbox LIVE internationally this fall. This marks an important
development in the Zune strategy and brings the Zune brand to more than 17
million international Xbox LIVE subscribers. In addition, Microsoft confirmed
the next generation of the Zune portable media player, Zune HD. Available in the
U.S. this fall, Zune HD is the first portable media player that combines a
built-in HD Radio receiver, high-definition (HD) video output capabilities,
organic light-emitting diode (OLED) touch screen, Wi-Fi and an Internet

“The Zune music player is an integral part of the overall
Zune experience, and we’re proud to be growing and extending our offering
beyond the device,” said Enrique Rodriguez, corporate vice president of the
Microsoft TV, Video and Music Business Group. “Delivering on Microsoft’s
connected entertainment vision, this news marks a turning point for Zune as it
brings cross-platform experiences and premium video content to living rooms
around the world.”

Zune Service Expands to New Platform

Zune will be a premium partner in the Xbox LIVE Video
Marketplace, bringing an exciting catalog of TV and film to the platform. Zune
will occupy the first slot within the Xbox user interface in the Xbox LIVE
Video Marketplace, exposing the Zune brand experience to millions of new
consumers for the first time. At the Electronic Entertainment Expo (E3) next
week, attendees will see firsthand how Zune integrates into Xbox LIVE to create
a game-changing entertainment experience.

Introducing Zune HD

  • Zune HD is the next iteration of the Zune device family and
    brings a new level of listening and viewing experiences to the portable media
    player category.
  • Zune HD comes with a built-in HD Radio receiver so users can
    listen to higher-quality sound than traditional radio on the go. Users also
    will have access to the additional song and artist data broadcast by HD Radio
    stations as well as additional channels from their favorite stations
    multicasting in HD. If you don’t like the song playing on your station’s HD
    channel, switch to its HD2 or HD3 channels for additional programming.
  • The bright OLED touch screen interface allows users to flip
    through music, movies and other content with ease, and the 16:9 widescreen
    format display (480×272 resolution) offers a premium viewing experience on the
  • The HD-compatible output lets Zune HD customers playback
    supported HD video files from the device through a premium high-definition
    multimedia interface (HDMI) audiovisual docking station (sold separately)
    direct to an HD TV in 720p.*
  • Zune HD will include a full-screen Internet browser optimized
    for multitouch functionality.
  • Zune HD is Wi-Fi enabled, allowing for instant streaming to
    the device from the more than 5 million-track Zune music store.

Does Home Server & Media Center Mean a Connected Future?

Preface: Before you read
this please try and get in the right mindset. 
Microsoft doesn’t care about what anyone reading this blog wants.  They don’t care what I want either.  It is a hard truth to take, but that’s a
fact.  They will say that they listen to
all requests, and that’s true, they do. 
What they don’t do is make any sort of business decision (translation,
features) based on my ramblings, The Green Button, Engadget, or anyone else.  They don’t make Media Center for “us”,
and before anyone can start to understand the points I try and make about
Windows Home Server you have to realize this. 
You also have to understand that Media Center has not taken the market
by storm, and that six years into it the vision simply isn’t working to achieve
the goal Microsoft originally set out achieve (hints shift in marketing).  Knowing this, please continue.

Note: I don’t work for
Microsoft, this post reflects my personal opinion.

Drawbaugh has an excellent post on what he perceives to be the future of
Windows Media Center
, and that’s its integration with Windows Home
Server.  Ben’s post is excellent, running
down a logical path of what Microsoft should do with the assets they currently
have.  You take Windows Media Center and
integrate it with Windows Home Server, sell it for $500 and users can add
tuners later.  Add in Live Mesh, Zune HD
syncing, and really connect the dots for a truly logical integrated product.

Now, maybe it is because I’ve been following Media Center a
bit longer than Ben, but why all the sudden is Microsoft going to “get it” and
integrate everything in the logical manor it should be?  Why does the introduction of Windows Home
Server mean everything will “just work?”

Here’s the deal.  It
is clear to me that Microsoft’s shift in customer marketing means the concept
of a whole home connected device with Media Center as its core isn’t
working.  Why else would Microsoft shift
to pushing “TV
on your PC?”
 It just doesn’t make
sense to me that Microsoft would shift the culture and marketing of Media
Center, and then turn around and integrate everything the way it should be.  You can see the shift in their marketing as well.

  • 2007/early 2008: “Windows Media Center turns the home PC into the ultimate connected entertainment hub and is available in every copy of Windows Vista Home Premium and Windows Vista Ultimate.”
  • Today: “…builds on Microsoft’s goal to create a consistent experience on the PC for consumers to easily enjoy the entertainment of greatest interest to them.”

I’ve said for years that I
don’t see the market value in Home Server mixed with Media Center
.  I consistently get crap for this, but that’s
because everyone reading this wants exactly what I say doesn’t make sense to
produce, or rather what will not help Media Center in the marketplace. How many
people here are not using Media Center strictly because it requires them to run
two separate PCs in their home?  How many
sales are lost because of the current infrastructure?  How many sales do you gain by integrating the
two?  Have you opened up a significantly
new market by doing so?  I can’t come up
with any answers that benefit Media Center from these questions.

If Microsoft is having trouble pushing Media Center in homes
for whole home connected entertainment, the solution is not to integrate it
with a product that even fewer people understand (a “Home Server”).  The solution is actually to change paths and
try something completely different.  Sometimes
redefining a product is needed to keep it alive.

So does this mean I don’t think Microsoft will integrate
Media Center with Home Server?  No, I
think the opposite.  Last year I got a
tip that something
is coming as a “headless” device
, and I haven’t heard anything to say that
has gone away.  It would be perfectly
fine to suggest anything “headless” that comes out of Microsoft would be based
on Home Server.

So I’ve established that I think a Home Server with Media
Center integration will happen, and at the same time that the product will not
have a significant amount of mass market value over that of the current model.  Microsoft’s future for connected platforms
does include exactly what they say it will. 
The “3 screens,” which spans the PC, the phone, and the TV.  The way I see it PC = Windows 7, Phone =
Windows Phone (aka Windows Mobile), TV = Xbox 360.  I don’t see any need for Media Center as a
whole home device in their grand vision, which is why I’m questioning the concept of Microsoft getting things right just by the
inclusion of Media Center into Home Server

Maybe I’m right, maybe I’m wrong.  I’m hoping I’m wrong, but given the way
things have been going, especially with Extenders (which in the case of a
headless device are key), I don’t see such a product making any impact in the
marketplace.  More so, I don’t see
Microsoft investing the time to use Media Center as the core for the home.  Media Center isn’t dying, it isn’t coming out
of Windows, but I continue to think the focus will shift.  Microsoft will still work with partners on
Extenders (I’ve been assured of this), but they will still release products and
features that forget these Extender’s even existed.  They will connect your life, but they will
not connect your life using Media Center.

What is your opinion?

The Story Behind Netflix for Windows Media Center

Today Microsoft released their native
Netflix application for Windows Media Center
to much fanfare.  The release comes with a catch, but let’s
back up a bit before we get to that.

I’ve talked about the need for Microsoft to get Netflix
within the Media Center ecosystem, and ever since Reed Hastings joined
Microsoft’s board I
knew it was coming
.  A year ago
Microsoft announced Netflix would be coming to the Xbox 360 Dashboard and that
rekindled my thoughts about the Xbox
360 being Media Center biggest enemy in the marketplace
.  Today those thoughts are confirmed once again
by the Netflix application for Media Center not supporting Media Center

I’ve been testing the Netflix application for a few weeks
now.  Upon downloading the first beta I
read  the release notes which talked
about Extender’s not being supported.  I
figured this was something that would change. 
Sadly, it didn’t and was planned at all. 
I didn’t think I’d get to post this part because it was told to me under
NDA, but TechFlash
actually posted it so I’m in the clear. 
Part of the reason Extender’s are not supported is because Microsoft
wants to make sure they don’t compete with the Xbox 360 Dashboard.

 Leaving the technical
aspects of getting Silverlight to an Extender aside, this represents a huge
problem and once again confirms to me that Microsoft will continue to push and
promote the Xbox 360 Dashboard over that of the Extender platform.

Fellow MVP Richard Miller asked if
I would rather Microsoft have not released the Netflix application
, and it
isn’t so much that I think Microsoft shouldn’t have released, but what I really
want is Microsoft to define who Media Center is for (do I sound like a broken
record yet?) and the future of some basic items like Extenders (I’ll have
another post on this later, but Microsoft keeps assuring me Extender’s are not “dead”).

A few months ago I
suggested that Microsoft was changing directions with Media Center
to the
more customer friendly “TV on your PC” concept. 
I took a bit of flack from Microsoft on the post who suggested that
wasn’t the case.  Maybe is it and maybe
it isn’t.  Correct or not, I’ll stick to
my story because it seems like everything that comes out confirms my

Back to the Netflix application, the delivery of this is the
future of Media Center.  Just like
Internet TV, the Netflix application was automatically pushed to Media Center
without any initial user interaction.  If
they can just improve the installation it will be much more beneficial to end
users.  While the interface is very
intuitive I don’t have my Media Center connected to a TV.  Given this, I find Netflix’s website more
convenient.  Moving forward, if the whole
“TV on your PC” thing catches on this will be a huge issue of mine.  Media Center was designed as a 10-foot
interface, using it as a 2-foot interface is kind of tricky and it’s not as intuitive
as it could be.  This has improved with Windows 7, but I
would still rather use a website to find such basic content and leave the
10-foot UI where it belongs.

Microsoft and Netflix Enhance Movie and TV Watching on the PC

Latest content addition offers more than 12,000 choices
of movies and TV episodes that can be watched instantly on a PC with Windows.

REDMOND, Wash. — May
19, 2009 —
Microsoft Corp. today announced that more than 12,000 movies and
TV episodes from Netflix Inc., the world’s largest online movie rental service,
are now available to watch instantly on the PC using Windows Media Center on
PCs with Windows Vista Home Premium or Ultimate. This newest content addition
builds on Microsoft’s goal to create a consistent experience on the PC for
consumers to easily enjoy the entertainment of greatest interest to them.

With Windows Media Center, consumers no longer need to jump
from Web site to Web site to find the TV shows, movies, sports and news they
want to watch. Windows Vista customers who are also Netflix members can simply
start Windows Media Center on their PC and then select the new Netflix tile
under TV+Movies to begin streaming movies and TV episodes instantly. People can
also search the entire Netflix library, manage both their instant and DVD
Queues, and even filter searches by titles that are available to watch
instantly. Windows Media Center takes advantage of the Netflix recommended
category lists to make it even easier to quickly find the movies and TV shows
that consumers want to watch. Conveniently, Netflix in Windows Media Center is
also designed to work with any Windows Media Center-compatible remote control.

The availability of Netflix in Windows Media Center marks
the second recent content milestone for Windows, following the March 2009
launch of the Sports Channel, which offers a variety of interactive sports
content from, FOX Sports, and more.

“Netflix is excited that the majority of the Windows Vista
users in the U.S. can now access a vast array of movies and TV episodes from
Netflix through Windows Media Center,” said Steve Swasey, vice president of
corporate communications. “There’s no better way to enjoy movies than with
Netflix, and this latest offering is another milestone that gives Windows Media
Center customers a great experience using the Netflix service.”

The Netflix instant watching in Windows Media Center is
powered by Microsoft Silverlight, one of the industry’s most comprehensive and
powerful solutions for the creation and delivery of applications and media
experiences. The use of Silverlight means that customers will have more
accessible, more discoverable and more secure experiences. Windows Media Center
is available on Windows Vista Home Premium and Windows Vista Ultimate.

In addition to Windows Media Center users, Xbox 360 system
owners already have access to watch movies and TV episodes instantly from
Netflix via an Xbox LIVE Gold Membership. The offerings through both platforms
allow customers to enjoy more than 12,000 movies and TV episodes.

“We’re continuing to work with the top content providers
today to make watching TV on the PC a mainstream experience for the future,”
said Craig Eisler corporate vice president of entertainment client software for
the TV, Video and Music Business Group at Microsoft. “Consumers understand that
content is the driving force when it comes to experiences, and with Netflix,
we’re underscoring our broader commitment to deliver a rich experience with
Windows Media Center.”

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide
leader in software, services and solutions that help people and businesses
realize their full potential.