Microsoft's PlaysForSure partners in denial?

Microsoft's PlaysForSure partners in denial?

Summary: Last week, just before signing of on Friday, I pointed to the news that Microsoft had confirmed it's intentions to launch it's own portable media playback device.

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TOPICS: Microsoft
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Last week, just before signing of on Friday, I pointed to the news that Microsoft had confirmed it's intentions to launch it's own portable media playback device.  At that time, there were already a few reports on the Web including the original newsbreaker on Billboard Magazine but no one asked the next logical question:  If Microsoft is going to make its own media playback devices and run its own corresponding online service, what if anything does that mean for all of its partners in the PlaysForSure ecosystem that it's been building up over the last two years.  On Friday, I wrote:

The second question that comes to mind is, "What about all of Microsoft's PlaysForSure hardware partners like Creative Labs, Samsung, and iRiver?"  Their entire strategy is built around the notion that Microsoft is creating an ecosystem that each can equally play in and that Microsoft won't be competing against them. But if Microsoft is coming out with hardware, then something has changed. Either Microsoft can't count on these partners to help it compete against Apple's iTunes and iPods, or, the hardware it's coming out with is more of a reference design that its existing partners can build from....Only time will tell. 

That question also extends to the multitude of PlaysForSure-compliant online services such as Napster-to-Go, AOL Now, FYE, and Wal-Mart Music Downloads. As a reminder, the way the ecosystem works, Microsoft is basically the provider of the underlying PlaysForSureb-branded technology and the ecosystem consists of merchants that sell or rent downloadable PlaysForSure-compliant audio and video to owners of playback devices that they've purchased from PlaysForSure-compliant device manufacturers.  Music purchased for download from the PlaysForSure-compliant Napster-to-Go is therefore guaranteed to work on the PlaysForSure-compliant H320 portable digital audio player from iRiver. Music from a PlaysForSure-compliant merchants will not work on an iPod since Apple is not a licensee of Microsoft's technology. Likewise, music purchased from Apple's iTune's online music store won't work on a PlaysForSure-compliant device. 

Under the hood, the primary technology that results in interoperability, or lack thereof, are the two companys' incompatible copy protection technologies  otherwise known as Digital Rights Management technology (the technology that attempts to prevents pirated content from being uploaded to the Internet where anyone can get it for free). DRM is what I often refer to as C.R.A.P. (see CRAP, The Movie and CRAP, The Sequel).

Whereas Apple runs the online service and makes the hardware that's compliant with it (mirroring the strategy it has long taken with its computers), Microsoft's picked the partnering route in a strategy that mirrors the route it took with Windows where the company basically makes the software, licenses it to third parties, and let's those third parties duke it out in a competitive battle that ultimately benefits consumers (in terms of low prices and innovative hardware like notebook computers) as well as Microsoft who collects a bounty on every system sold. 

But with Zune, it appears as though Microsoft is prepared to take it all in-house and what exatly that means for the future of the partners that helped Microsoft to launch its  PlaysForSure-compliant ecosystem was left unsaid last week. This week, News.coms's Ina Fried dug a little deeper, but didn't unearth anything that's particularly telling of what Microsoft is thinking.  Reported Fried earlier today in an appropriately headlined story Swan song for Microsoft's music allies?:

Microsoft's Zune player is designed to be a counterpunch to the iPod, but it could deliver a sharper blow to some of the company's longtime partners....It leaves one question up in the air, however: Just how much attention will now go to Microsoft's PlaysForSure program, which promotes the broad range of services and players that use its Windows Media technology? Microsoft says it is not abandoning that 2-year-old effort. But it has not said whether its new player will support outside music services that use the Windows Media format, or whether any Zune service will work on outside players. On top of that, it has certainly not played up compatibility in what it has to say about Zune....some analysts have said the arrival of Zune signals an end to the company's broad-based partner approach....Microsoft denies things are so black-and-white. The software maker said it will continue to promote other products that have Windows Media technology at their core...."As a company, we remain committed to the strategy," a Microsoft representative said on Monday. "There's room for both kinds of approaches."

Ouch. That's what I'd be saying right about now if I was one of those partners that hitched my wagon to the PlaysForSure horse.  That said, Fried has one of those partners downplaying the signficance of Zune:

Device maker iRiver said it is not convinced that having to compete with its technology partner will be a bad thing.... That said, whatever Microsoft's first product is, [iRiver CEO Jonathan] Sasse said it is liable to compete directly with an existing device [on the market, not necessarily one of iRiver's].

Sure.  Short term, Microsoft will have something by the holidays that, from a specification point of view, compares tit-for-tat with one or two devices. But Sasse as well as his contemporaries are in denial if they think this isn't going to impact their business over the long run. Microsoft, of course, has to do whatever it thinks it must do to keep Apple from eating its lunch in the world of multimedia entertainment which is what Apple is doing, at least on some fronts).  On the other hand, this is exactly the sort of risk that companies licensing such foundational technologies (as DRM) take when those technologies are proprietary and why, if at all possible, it makes sense to hedge that risk with product R&D around something more open.  If I were Sasse, right about now, I'd be picking up the phone and calling Sun to find out more about the Open Media Commons and Project DReaM. It may not be perfect. But at some point, businesses and users need to get a better handle on how much of their strategies, budgets, and their investments in technologies (eg:users buying music) they're willing to subject to decision making processes over which they have no control (eg: those of the vendors of certain proprietary technologies). 

Two good examples: (1) As long as you own an iPod, you can't shop around for protected music (I say protected because, finally, at least one source of music -- Yahoo! -- is experimenting with unprotected music).  There's one source and it'll cost you 99 cents per song no matter what (eg: no matter if the music industry would like to charge you more or less). (2) You establish a reliance on a proprietary technology and the vendor of that technology either (a) decides to abandons that technology or (b) arbitrarily (at least to you) raises the cost of it.  What choices do you have then? 

Topic: Microsoft

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26 comments
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  • Ranching

    Hey, I'm trying to get away from the pervasive automotive metaphors, even at the risk of comparison to Darl McBride.

    Anyway, there's one thing a rancher knows: cattle are good, more cattle are better, and they don't make you rich while they're alive.
    Yagotta B. Kidding
  • Perhaps MS intends to play both sides

    MS licencses PlayForSure to a number of third parties who then compete in one or both of the on-line music service and hardware markets.

    Maybe MS intends to not only licence PlayForSure to third parties, but also to be one of the many competitors in the on-line and hardware markets?

    Assuming MS isn't as incredibly successful with Zune or an on-line service, there will still be plenty of room for all or at least most of the existing competitors. Third-parties may not like it, but its not the end of the road for PlayForSure.
    Feldon
    • MS Always Planned to Supplant PlaysForSure with Zune

      PlaysForSure Crowd Was Sucker Punched
      The PlaysForSure 'partners' were simply hosts for knowledge transfer to MS - which was planning to develop its own combined product and service even when they cut the deals with these sorry clowns who helped the company organize the PlaysForSure partnership.

      No one in his right mind would ever believe that Microsoft ever intended to make good on a relationship with vendors when they can own the entire model. The press release will hit soon discussing the 'problems', 'challenges' and 'lack of synergies' that doomed the PlaysForSure program. A lot of people will chuckle and nod in Redmond and murmur about the brain-dead chumps they sucker punched.

      The scheme has been replayed dozens of times: partner with sector experts, absorb ideas, intellectual property and get Microsoft employees a free education in the new enterprise sector, courtesy the witless partners - then kick the sorry losers to the curb.

      There is a lesson here. If you go to lunch with Jeffrey Dahmer, don't complain if you end up with your head chewed off of your neck and your internal organs on a plate.

      The PlaysForSure victims can probably sue, maybe form a class, but likely there are no fingerprints. If they are smarter in litigation than they are in business, they might subpoena the memorandums related to the initial planning for Zune. All they need really are the dates on those to make a case that Microsoft always planned to go to market without them, as if anyone with a pulse needed proof.
      Likewow
  • When you snooze you lose...

    And the fact is the third party guys weren't moving fast enough for MS or the consumer. They had their chance, they blew it.
    No_Ax_to_Grind
    • Ah how the worm turns

      Funny, I seem to remember you touting the incredible superiority of a system where there were lots and lots of devices that could play WMA files compared to only one that played iTunes files. And predictions of how this amazingly open system would quickly overthrow Apple's dominance.

      Now, of course, the blame lies at the feet of all the formerly honored partners, who apparently weren't "moving fast enough" despite investing billions of dollars, marketing like crazy, giving away free players, etc., etc.

      So, pray tell, what were all the partners doing wrong, or at least doing too slowly, and how will MS in its infinite wisdom, do things differently?
      tic swayback
      • i am convinced

        "So, pray tell, what were all the partners doing wrong, or at least doing too slowly,"

        I am convinced that there is such negative angst against WMA and MS's DRM along with the idea of not really being able to use the song anywhere you like (the play for sure subscription formula) is why Play For Sure is failing.

        If the world ignores the new MS product, we will know wherin lies the problem won't we?
        WinnebagoBoy
  • The Microsoft Mouse has not killed the Mouse business

    Microsoft sells high-end keyboards and wireless laser mice. That hasn't killed Logitech and all the other hardware companies that produce mice and keyboards.
    georgeou
    • Very good point.

      I agree.
      No_Ax_to_Grind
    • One big difference

      But you can use a non-MS mouse with an MS computer. If Zune goes strictly MS-sold music, then you can't use songs sold by any partner companies with the Zune.
      tic swayback
      • Huh, what ever gave you that idea?

        As long as it is in the wmv/wma it will PLAY FOR SURE. Stop talking when you have no idea w2hat your talking about. You seem to have this confused with Apple's lock in system.
        No_Ax_to_Grind
        • Unlike you, he read the article first

          [i][/i]
          Yagotta B. Kidding
        • Pay attention

          The whole debate going on here is the indication that MS will make Zune its own ecosystem and incompatible with all the Plays For Sure products. Or did you read a different article than I did?
          tic swayback
      • In addition...

        ...the MS-Mouse protocol is well known, which means that rival mouse manufacturers can use it and be assured of compatibility with not only MS operating systems, but several non-MS OS' as well.

        Somehow, I suspect that MS plans to keep enough of the technical details hidden to insure:

        1. A Zune can only be administered from a Windows PC,
        2. The software employed to administer a Zune cannot be used by other players.

        Then again, given past history, we might see people load alternative software on a Zune in much the same way they do on X-boxes.
        John L. Ries
    • Yet

      Of course, the present MS software will also run with non-MS mice and keyboards (the reverse isn't necessarily true.)

      That rather limits the analogy, no?
      Yagotta B. Kidding
      • Your confusing MS with Apple.

        ;-)
        No_Ax_to_Grind
        • MS is confusing themselves with Apple...

          ...given that they're emulating the iTunes ecosystem with Zune. Hey, you can't argue with success.
          tic swayback
    • Different Biz Model

      You don't pay a subscription or a "pay to play" fee for a keyboard or a mouse.
      Xwindowsjunkie
  • Little or no effect to partners sales

    The Microsoft "Plays for sure" was simply not much of a selling point (from the consumer's point of view) for partners who use it in their players.

    The question those partners are asking: is this the end of the road for "Plays for sure"? Will PFS be phased out or sidelined by the new Zune technology? Microsoft isn't saying just yet.
    WiredGuy
  • A lossless format?

    Could a new format simply be WMA Lossless in a Play's For Sure wrapper? One of the largest complaints against "E-Songs" is that they are stored in a "Lossy" format be it MP3, WMA, AAC, etc.

    There are a number of lossless formats such as Monkey's Audio, FLAC, WMA Lossless to name a few. But none of them are playing on the Plays For Sure format. Perhaps all the new player will do is add this feature as the default while still supporting the current WMA DRM standard.

    If Microsoft were to support lossless and invest in an improved storage format needed to store lossless media, I would get one. This need not be the end of Plays For Sure, but simply PFS 2.0 without cutting off all the current users.
    ajfaull@...
    • A really good point ...

      I joined the iTunes camp with my eyes wide open, in part because I felt that AAC was a better format than MP3, which is clearly superior to WMA. But, what won me over was that iTunes offers Apple Lossless compression for my CD library.

      Everyone has predicted the demise of CDs but it won't happen until lossless compression is available in a download-by-the-song environment -- DRM or not!

      It appears that 99 cents per song is the price-point to beat. If M$ develops a PFS-protected lossless solution at that price-point, it will force iTunes to follow suit.

      There is still plenty of money to be made selling MP3, WMA, and AAC music at lower price points, with or without DRM, but if M$ and Apple offered lossless solutions, the competition could really heat up in this market.
      M Wagner