Microsoft to launch Zune store for WP7

Microsoft to launch “within weeks” a store and subscription service for its new Windows Phone 7 phones.

This article titled “Microsoft to take on iTunes with Zune music and video store” was written by Charles Arthur, for The Guardian on Monday 20th September 2010 23.01 UTC

Microsoft is to launch an online music and video store and music subscription service to compete with the likes of Apple and Spotify.

The store and service will be offered under the Zune brand, initially the name of Microsoft’s digital music player launched in 2006 as a would-be iPod killer. It failed to make a substantial impact on the US market and the player has never been available outside north America.

However, last November Microsoft launched a film-streaming service under the Zune brand for the Xbox 360 in 18 countries, including the UK and 14 European and Scandinavian countries. The store and subscription service for Windows PCs, its new Windows Phone 7 phones and the Xbox 360 games console will be launched within weeks.

The Marketplace service will offer 8m songs at prices the company described as "competitive" with rivals such as Apple’s iTunes Store, which dominates the downloaded music sector, and Amazon. The songs will be in MP3 format, and be encoded at high quality – between 256kbps and 320kbps. They can be bought via PC, Windows Phone 7 phone or Xbox 360.

The Zune Pass service, which will cost £8.99 per month (or €9.99 in Europe), has been available in the US since November 2008. It allows unlimited downloads and streaming of music from Zune Marketplace, but only while the subscription is paid; once stopped, the songs are deleted. It is positioned as a challenge to Napster, the music streaming service, and to Spotify, the Swedish music-streaming service which offers an ad-funded service for computers, and "premium" ad-free service for iPhones as well; in March it was reckoned to have more than 320,000 subscribers. Music downloaded through Zune Pass will only play on PCs, Xbox 360s or Windows Phone 7 devices – not other digital music players or Apple devices.

Microsoft’s principal target may well be its Xbox 360 Live subscribers, who number 46m worldwide.

Alex Reeve, the Microsoft UK director of mobile business, acknowledged that subscription services such as Napster have struggled to make money. "In many markets, buying music is the dominant method," he said. "But subscriptions offer flexibility. It will be fascinating to see what the uptake is, but we don’t know at present."

But Reeve added that Microsoft is not trying to mimic the ad-funded music streaming and download service offered by Spotify and we7, a British company. "We don’t think that’s the right way to go," he said.

It is likely that the music streaming function on Windows Phone 7 will be limited by mobile operators’ data caps, although the service allows unlimited downloads of music onto the phone for later listening.

The Zune Pass service will be on offer with one-, three- or 12-month rolling subscriptions, including a 14-day free trial. However it will require a credit or debit card to sign up for the service, which may put it out of reach of Xbox users aged under 16; they cannot use Microsoft’s Points system, used to pay for chargeable content on Xbox Live, as a proxy.

Xbox 360 users will see the Zune and Zune Marketplace services appear as a new tile on the home screen when they are launched. It will be controllable by the standard Xbox controllers, or the forthcoming Kinect hands-free service which is coming to the console from 10 November.

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