Final Zune v2 Thoughts

I got last weekend and reviewed the rest of the comments on
my Zune posts from the week before and realized that I needed to clarify a few

First of all, I still believe that the Zune is no iPod
competitor. Why?  It really doesn’t
matter what features are there for the Zune, it is not an iPod.  As I have said in the past, the iPod is 25% a
great digital audio player and 75% a product of Apple marketing.  The sales of the iPod didn’t come from the
features.  Sure, they helped but overall
that is not why the iPod is what it is today. 
The name “iPod” is generic now; it is an interchangeable term that
millions of people use to describe an MP3 player.  Zune will never match, and therefore Zune
will never be a true iPod competitor in my opinion.

Having said that, I look back at some of my previous
comments and I want to note that while Zune will never overtake the iPod, I
think the best thing Microsoft can do is appeal to niche crowds in order to
sell it.  There are features of the Zune
that a lot of iPod owners would likely never use, however those same features
will bring in niche crowds.  Wireless is
an example.  Great feature, but if I buy
a Zune for my Dad, an iPod owner, it would never get used.  Same with the social features, same with the
FM tuner, same with recorded TV syncing, etc. 
All of those features might put the Zune over the top of the iPod based
on pure features, but in this iPod world today they become niche features.

Zune v2 is almost what Zune v1 should have been.  But, the lack of integration between
Microsoft products is driving me nuts, and it does start to turn me off
products from Microsoft even though competing products don’t integrate how I
want either.

So the question is would I buy an iPod over a Zune?  The more I think about it, it depends.  I was tempted when I saw those $99 Zunes on
Woot yesterday until I saw they were referbs. 
The wireless sync is a very nice feature, and depending on how it works
for everyone else that might put a Zune in my hands next.  The fact that it still doesn’t integrate with
Media Center just plain sucks.  They can
call importing recordings into the Zune Software “integration” all they want,
but when I pull out a Portable Media Center and can sync using a 10” UI that is
what I call integration.  Give me that
with the wireless sync and I’ll buy. 
Being able to create playlists in Media Center, my main way of listening
to music, and then being able to sync that wirelessly with the Zune is what I
want.  This needs to work from Extenders too.

Also, I generally go with two players in my collection.  One is for working out (flash based), and one
for the car/plane trips/normal listening/etc. 
The Zune has no match for the iPod Shuffle yet and it really needs
one.  Another one of the iPod strength
comes from the fact that there really is one for every member of the house.

 If the Zune can
continue to increase features in software (and not require new hardware to get
the majority of them) and integrate better with Microsoft’s own software, then
I’ll consider it for my next player.

Edit: Aaron posted in the comments, but I wanted to point
out his post on The Green Button
about his converting to a Zune because of
the $99 Woot deal and liking it, at the original price he said he wouldn’t have gone for it.

28 thoughts on “Final Zune v2 Thoughts

  1. Okay, so you are not a subscription music fan. But that is the direction the market is moving.

    So either iPod follows Zune, or Apple loses share…period.

    So, sure, Apple popularized a commodity piece of hardware…not necessarily a great long-term strategy, but hey…

    Microsoft is pretty good at exploiting commodity hardware…

    Just as an aside, people used to workout with cassette walkman’s, so while you feel the shuffle is required for this niche, not everyone will agree.

    And the subscription service alone helps with that decision–after all, there just is no way to rationalize 99-cent tracks with an all-you-can-eat plan.

    Granted I don’t understand Microsoft’s marketing failure, but value proposition is off the charts (so to speak)…

  2. At this point, how can one make the statement that subscription music is where things are headed? Because the smaller guys have been doing this for years and years, and all the sudden it is where the market is at? Napster has been doing it since 2005. Rhapsody has been streaming their whole catalog since 2001. eMusic has been doing it for years to.

    If that is the direction the market is moving, why do these major label supported services have almost nothing to show for it? Answer: They don’t work on the iPod and they don’t have anything to do with Apple.

    I’m not saying it isn’t where the market is going, and I’d love to see more subscription services that matter but just because Microsoft is doing with the Zune and Rick Rubin said it is the future doesn’t mean everyone will bite. Apple drives the market, end of story.

    Sure there is a way a rationalize 99-cent track (or CD purcahses, physical discs). When I’m 60, I’d still like some music that I can listen to which is why I’d like a limited subscription music plan+me buying music that will last after I don’t pay per month (DRM free, of course).

    That said, I’m actually a semi-fan of subscription music, but I’d also like to have a library after these services disappear. Digital distribution is the current and future, but that doesn’t mean much of anything in terms of what these companies will do once the next method is capitalized upon.

    I’d say the name “iPod” is a good long term strategy, my guess is that it will be 10-15 years from now before someone starts to overtake it. How long did Sony rule the market with Walkman & DiscMan? Started in early 1980, and ended around 2000. That’s 20 years they got off that naming.

    If you are suggesting that because people used to workout with large devices they will still want to do the same, you need to get out more. 🙂 If that is your argument, would you like to trade your current cell phone for a DynaTAC 8000X or like? Didn’t think so. Remember, the market is moving and it is way past people going back to things they did 20 years ago.

  3. Chris,
    Overall I think you are a little too negative (jaded?) regarding the Zune. I am an Xbox 360 owner who deliberately did not buy Zune 1 but waited for Zune 2. I am glad I waited. And one more thing, I know you are a Media Center fan, but the REAL victory for MS is if they could link the Zune Marketplace to the Xbox marketplace. Get a song/video/game trailer through Marketplace and have it work on both the 360 and the Zune. THAT is what would sell Zune’s in my opinion. Your thoughts?

  4. Paul: You say I’m too negative, but the point of your post shows my exact reason for being negative.

    It would be a real victory for the Zune Marketplace to play nice with the Xbox Marketplace. It would also be a victory if Zune worked with Windows Media Player (there existing playback application). Same with PlaysForSure vs. Zune, and so on.

    It is hard not to be negative when you look at all of Microsoft’s products that don’t work together. Apple, and the iPod on the other hand work hand and hand basically from day one.

  5. True, true. I see the point of your post. It is my belief (maybe blind faith?) that the 360 Marketplace and the Zune Marketplace will work together soon. MAYBE as soon as the Fall 360 Dashboard update.

    If the Marketplaces don’t work together by the Spring 08 Dashboard update (at the latest), then I think MS is really missing the boat.

  6. I’m an admitted convert (to Zune). Well, that’s for now anyway. At $99 I couldn’t resist. I’m really impressed by the UI, and apparently it’s getting even better in November.

    Anyway, I pay attention to the popular gadget sites as well as the forums for “good deals”. One thing that’s been noticeable over the last few weeks is this:

    a) A lot of people seem interested in the Zune at the lower prices
    b) Pretty much everyone who has used the Zune loves it

    I don’t think there’s enough here to topple the iPod regime. But it’s interesting to me that a product which for all intents and purposes was dead and buried for most of 2007, is seemingly making a comeback due to cheaper prices and viral communities like Woot. The Zune 2 appears functionally superior to the iPod Classic, it’ll be interesting to see if people catch on.

    Additionally, I think a lot of people see the iPod Touch as a let-down due to price and capacity. The Classic is feeling stale even with the addition of coverflow. Could Apple be a tiny bit vulnerable right now?

  7. Paul: I agree.  It also needs to work the other way around.

    The Xbox Marketplace has the best HD video downloads on the market (iTunes doesn’t have any). Yet, they can’t be enjoyed through another product in Microsoft’s Entertainment & Devices division, Media Center.

    The really sad part is that Zune, Media Center, Xbox 360 are all in the same division!  Unlike before where each division is like it’s own company within Microsoft, they have reorganized so that they are all under the same roof.  They better start working together, it is just sad that it is like this today.

  8. I agree with chris. The iPod is a force, and while the Zune has a ton of new features that the iPod doesn’t, it doesn’t have the name to ever be considered a real iPod competitor and it is likely that no product in the near future ever will.

    That said, like Chris I will consider it for my next player but having to redo my 15,000 track library in another crappy WMP based application is not what I want. For this alone, I would consider iTunes and an iPod.

  9. iPod is definitely the market leader and that in and of itself could be the niche that the Zune goes after. The iPod is so ubiquitous these days with every soccer mom having one that it’s lost a lot of it’s, “I own an iPod” cachet. There is usually a tipping point with products that once something hits mass saturation people start looking at alternatives if only to be different. A popular insult these days among the youngsters is calling an iPod owner an “iSheep” if only for buying what everyone else is. Silly but it shows that the idea is already out there germinating. One of the big reasons I picked up a Zune was pure aesthetics, I like Zune matte finish over iPod glossy, plus I dislike like sleeves or cases and it seems one is pretty much required for an iPod while the Zune handles daily life fine without one.

    Microsoft seems to have cut it’s teeth on v1 and the baby set is v2. More people are taking notice of the Zune in a positive light, it’s getting a completely new ecosystem and is now poised for much faster mobility in the marketplace since they are no longer tied to either WMP or the previous URGE backend framework. If Microsoft times it right and rolls out XBox 360 Marketplace and Media Center integration with a v3 then we’ll see a real adult set of teeth ready to aggressively take a bite out of Apple. It’s my hunch that Microsoft knew v1 was lackluster and purposely didn’t hit the marketing hard, instead waiting for v2 to pump it up and may even wait until a v3, though that could be too late by by then.

  10. @David:

    The new Zune software isn’t WMP-based. For the record iTunes isn’t any better. Both the old WMP-based Zune software AND iTunes are horrible with my 80GB+ library. IMHO the best Windows media library and player right now is Winamp, especially with the new Bento skin in the just released 5.5.

    Lastly I’m not sure what exactly you’d have to “redo” in your library? As much as I dislike both iTunes and the old Zune/WMP software there wasn’t much I had to redo as all the metadata is stored in ID3 tags.

  11. You said: “Sure there is a way a rationalize 99-cent track (or CD purcahses, physical discs). When I’m 60, I’d still like some music that I can listen to which is why I’d like a limited subscription music plan+me buying music that will last after I don’t pay per month (DRM free, of course).”

    But have you ACTUALLY done the math? If I bought 5,000 songs from iTunes today, it would cost $5,000. If I selected the same 5,000 songs from Zune Marketplace and “rented” them for 30 years, guess how much it would eventually cost: $5,220 after 30 years.

    Of course, if I “rent” Zune’s soon to be 3,000,000 tracks for 30 years, guess how much it would cost: That’s right, the same $5,220.

    Time value of money says it makes no sense to buy a track today.

    Why I know subscriptions will grow? Because my iPod loving 15-year-old changed her iTune (forgive the pun) the first time she watched me download the latest album she wanted to buy basically for free (because of my zunepass).

    Top item on her Christmas list this year: a Zune2 flash player…not the least of which is that all her music will be *free*, since it is covered by my zunepass!

    (And yes, I will also be upgrading from my Media Center 2005 machine to a Vista one for the FREE video downloads)…

    P.S. what about the Universal Music subscription rumors?

  12. If you think the Zune service will be open for 30 years then good for you, but when you can’t play any of that music after 7 years don’t come crying to me. 🙂 Once Microsoft realizes that Zune is number two, they will start to slip and close the Zune store just like they did with MSN Music. You can also look at Google Video as an example. People purchased DRM’ed video and now it is all worthless because Google shutdown the service.

    I don’t know what you hear about Universal Music, really doesn’t matter. I said I’d love to see more, but that subscription music is nothing new. Again, if you think you will be able to play any of these tracks 30 years, your going to be in for a shock.

    If you want another key example, I would point to DIVX (not the codec, the rental format).

    Anyway, good luck with your “investment” for the next 30 years. Enron was almost a better idea. 🙁

  13. I find arguing over subscription-based music to be a pointless endevour, not because either side has less valid points but because each has their own relationship with music. For some being able to physically point to a certain section of hard drive or slot in a CaseLogic case is very important and nothing will ever change that while others find freedom and security in music subscriptions since no one can ever steal their collection and no hard-drive crash will take down the carefully ripped tracks.

    This is where Zune’s Marketplace actually shines as it suports both mindsets, something I don’t believe any other online music provider does.

    What I find so odd is this desire to force people to use one or the other, to somehow label one as “better” when they are obviously so different that they really can’t be compared.

  14. “What I find so odd is this desire to force people to use one or the other, to somehow label one as “better” when they are obviously so different that they really can’t be compared.”

    That’s funny, because this is exactly what you have been doing with every iPod v Zune post.

  15. No offensive Shawn, but your posts are getting ridiculous. I know you love your Zune, but now your digging yourself into holes trying to say it is pointless to argue about things. Just stop.

  16. I think what killed WMP 11 and meant Zune had to have it’s own player is the EU. Include WMP 11 as your player then the EU cries monopoly….something that Apple seems to get away with. By bundling a new player with Zune, and putting the investment into that player, MS circumnavigate the EU problem, get to invest in a nice software package and can start making in roads to a unified MCE / 360 / Zune experience. Its also note worthy that the new DRM’less tracks for the Zune will be pure MP3…no wma, no digital water mark etc. It looks like MS have decided to stop with their better codec and go for mass adoption, now that could be an iPod killer.

  17. I understand that the EU decision might be the reason for a separate Zune player, but you can’t have two different players on the PC that function independent it different Microsoft programs. Media Center uses Windows Media Player exclusively, and if I get a Zune then I have to manage two programs despite the fact that both of them came out of the same house.

  18. You said: “If you think the Zune service will be open for 30 years then good for you, but when you can’t play any of that music after 7 years don’t come crying to me.”

    And why would I? Assuming I ONLY rent the 5,000 songs; each song costs me 3.6 cents per year to rent (that’s three-tenths of a penny per month).

    Assuming the store shuts down in seven years, my cost per track (if limited to 5000 songs mind you) would be 22 cents. So what if I have to buy a track I still love then and there are no subscription services? Well, I will gamble that the per track cost will have dropped from 99 to 79, I guess.

    Still remember that these comparisons only work if I voluntarily LIMIT my subscription to 5000 songs, which you would have bought TODAY at a cost of 5000 dollars. Since I can actually listen to tens of thousands of experimental tracks while perserving a subset of “permanent rentals” my actual “carrying cost” of three-tenths of a penny a month are actually MUCH lower…

    In summary, it great to “own” tracks…it just doesn’t make any financial sense. Heck, if I calculated your hidden cost of ownership (i.e., dedicated additional storage, backup protection, etc.), it would be even worse.

    The thing to focus on is not “renting” versus “owning”, it is the differential cost of rental pricing versus purchase pricing (which is a somewhat different animal.

  19. You missed the point, I didn’t say anything about whether it will cost more in the long run. I said that I would like to have music to listen to in 30 years. I said nothing about a subscription service being better on a cent-by-cent basis.

    Of course, under your concept it also doesn’t make financial sense to go to the movie theaters (which I personally don’t anyway), to rent a movie (because at some point it will be on cable), and dozens of other things which millions of people do. Don’t confuse what makes compete and total financial sense to how the markets really work. In the real world, most people don’t (and much of the time can’t) make decisions based on the pure financial aspect of it.

    So, to quote myself “I’m not saying it isn’t where the market is going, and I’d love to see more subscription services that matter but just because Microsoft is doing with the Zune and Rick Rubin said it is the future doesn’t mean everyone will bite. Apple drives the market, end of story.” and “I said I’d love to see more [subscription services], but that subscription music is nothing new.”

  20. I’ve been a Napster subscriber since March of 2005. I love the subscription model. I realize that the service could go away and I would have nothing to show for years of subscription fees, and I’m OK with that. The Achilles heal of subscription services, however, is how much music is not available. For any given song I care about, there’s about a one-in-three chance that the music is either missing or is available for purchase only. It drives me nuts. I still consider the service worth the monthly fee, but most people won’t go for it if they still have to shell out cash to buy music the rental service doesn’t provide.

  21. I see your point Chris about two players. I don’t have vista so I don’t know, but does MCE specifically need WMP 11, or a WMP. Running MCE 2005, I know it didn’t matter if it was 10 or 11. Now as long as the Zune player has the mechanics to run with MCE then you will only need one player. As I said I don’t know if this is the case, but would make sense.

  22. Vista Media Center exclusively uses WMP 11+ (you can’t load WMP 10 on Vista). Having the Zune software relace WMP 11 would be the goal, or at least syncing the players libraries. Either of which is an option as far as I know.

  23. Okay, I guess I will give up. The whole point is that there is a discongruity between per track pricing and unlimited catalog rental pricing.

    The net effect of that discongruity is to make RENTAL far more cost-effective than PURCHASE for the same item.

    In the real world, there are various fact scenarios that create multiple congruities for a particular act or action; i.e., leasing versus buying a car, renting versus purchasing a home, yes even renting a DVD versus buying a DVD versus attending a movie theater performance, etc. The relative weighting of the options is specifically influenced by the various fact scenarios.

    However, in the digital world of musical track acquisition, there are NO FACT variances that properly influence the particular act or action. Thus the only remaining variables are Price and Quality. Positing a standard quality eliminates it as a variable as well, reducing the analysis to one of price alone.

    Now, at what differential is congruity restored to the issue? My personal answer is approximately 20-cents a track for DRM-free purchases versus the current $15/month all-you-can-eat.

  24. One of the big cons with the digital download for cash is the fact that the album price for a lossy product is the same as that for a lossless cd. Forget the ‘you can’t tell the difference’ argument, you are getting a lesser product for the equivalent price. The trade off of flexibilty was wiped out with DRM. The balance will be addressed as more and more non DRM products come to market, but does the cost of a lower quality product combined with its flexibility by being a digital product compare to the same lossless cd?

  25. I agree that there’s a very little chance that the Zune can beat the iPod in terms of market share, but “little” doesn’t mean “no”. There’s one FINAL method — price. Put it this way, Zune is not a bad media player. But at the current price point, it just doesn’t have enough juice to win over the love of iPod users. If Microsoft really wants to win the war, instead of wasting money on marketing (which it will have a hard time fighting against Apple), it should just lower the price of Zune. Lower it to a point that most casual iPod users can no longer affod not to see Zune as an alternative to iPod when they are about to make a purchase decision. Making it so cheap that people who can’t afford a media player now (trust me, they are out there) can afford one now. Yes, that means MS has to take a loss. But once it gets the volume, selling the next generation of Zune will be easier.

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