Microsoft Dances Closer to the Set-Top With Xbox Music

Microsoft's new Xbox Music service represents one component of the company's effort to fortify its ecosystem. Cable and satellite TV providers -- not just online music service services -- should worry about Xbox Music's debut, noted tech analyst Rob Enderle. Like Apple TV, the Xbox could one day replace traditional cable boxes with alternatives tied to a parent technology.


Microsoft is taking another stab at the digital music industry with the Tuesday launch of Xbox Music, a streaming music service that will be an update to the Xbox. It will also be released as a built-in feature on Windows 8 PCs and tablets later this month.

The Post-Zune Era

This, of course, is not Microsoft's first stab at entering the digital music market. There was the Zune brand, now retired after failing to gain much traction.

There are some similarities between Xbox Music and Zune -- both are multichannel services that incorporate the use of other Microsoft products.

Zune included a line of portable media players, digital media player software for Windows, a music subscription service, music and video streaming services for the Xbox 360 game console and the media software for Windows Phone, among other features. It was all discontinued a year ago.

Xbox as Set-Top Box

Xbox Music is clearly different from Zune in some important respects -- and it can be expected to change the Xbox dynamic, Rob Enderle of the Enderle Group told TechNewsWorld.

The Xbox is being positioned as more of a set-top box going forward, he said. Microsoft carved out its identity at first with games and then movies -- and now it is incorporating music into the mix.

In fact, cable providers should be just as worried as other online music providers about Xbox Music. Like Apple TV, it is trying to replace traditional cable boxes with alternatives tied to a parent technology.

"Music has proven relatively easy, and Microsoft leads with games; it is video that remains the bridge too far and both firms are struggling here," said Enderle.

Digital Music Nation

Microsoft has another factor in its favor now with Xbox Music. Digital music has become mainstream, and consumers expect easy access and a smooth experience, said Patrick Reynolds, EVP of marketing for Triton Digital.

"There has never been more interest in or listening to online music," he told TechNewsWorld. The market has become a very big pool, and "there's room for more than one player."

The growing reliance on smartphones for everything is also changing how music is consumed, Enderle noted. "We may find that media services and access will define battles ranging from set-top boxes to smartphones over the next decade."

Table Stakes

In fact, a good music service has become table stakes for both Apple and Microsoft, Enderle said. It will be a critical issue for Google as well, if it is not already.

Google still relies mostly on third parties, he noted. However, "their music service, while not as well known, is actually rather good, being a bit more consumer-focused and a bit less record-label friendly."

In this rapidly shifting environment, can Microsoft make a dent? How the user experience syncs up with the broader environment could be crucial.

"It depends on how baked-in it is to the other aspects of the Xbox environment," said Reynolds. "If the experience is great and seamless and additive to the overall consumer experience, it will work."

Xbox Music: Microsoft launches challenger to Apple's iTunes

Zune failed to take on the might of the iTunes music service, but nowMicrosoft is back for another bite at the cherry or, more accurately, the Apple. The software company has announced Xbox Music, an all-in-one digital music service that will make 30m tracks available to users via Xbox 360, as well as PCs, tablets and smartphones running Windows 8 or Windows RT.

The new platform is split into three strands. A free streaming service will provide ad-supported access to the library, but this will be limited to a certain number of hours after six months. Alternatively, a premium, unlimited, ad-free streaming option is available for £8.99 a month. Customers will also be able to purchase and download any track from the catalogue.

Launching on Xbox 360 on Tuesday and other platforms later in the month, the cloud-based service will allow users to synchronise their music across multiple devices. A Smart DJ feature will provide users with recommendations, as well as personalised playlists and instant mixes, while the display shows artist information and discographies – all reminiscent of the successful Spotify digital music service. Microsoft says it will also be offering a cloud-storage option later in the year so customers can "scan and match" tracks they already own, opening them up for free use on the Xbox Music platform.

Although Microsoft's Zune music service failed to challenge in the digital music sector, its media player axed in late 2011, the company may be in a stronger position this time. Xbox Music will be made the default music service on Windows 8 PCs when the OS launches on 26 October, giving the corporation a huge potential audience. It will also be an integral part of the redesigned Xbox 360 dashboard when it updates this autumn. Microsoft has noticed that console owners are increasingly using their machines for other forms of entertainment rather than just games. Last year, the company revealed that more than 42% of Xbox owners watched more than an hour of video content a day on their machines.

The key proposition with Xbox Music is its pervasive design. With free, subscription and purchase options, as well as artist-based playlist features, it is effectively taking on iTunes and Spotify simultaneously, while also challenging other emerging cloud-based music services such as Google Music and the Amazon Cloud Player. With social sharing features also set to arrive in early 2013, Microsoft is determined to leverage every feature of digital music consumption into the service.

"The launch of Xbox Music is a milestone in simplifying digital music on every type of device, and on a global scale," said Microsoft's president of interactive entertainment business, Don Mattrick. And if the future of entertainment consumption is all about seamless cross-platform functionality, it's certainly a step in the right direction. The weakness in the chain, however, is the Windows smartphone platform, still dwindling in a distant third place behind Apple and Android devices. However, at a press event to mark the launch on Sunday night, Microsoft executives were promising Xbox Music apps for Android and iOS devices early next year. That will make it a much more powerful proposition in a marketplace where fragmentation and incompatibility continue to disorientate music fans.