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 browser.

“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 go.
  • 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.

Ben 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 Extenders.

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 suspicions.

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.