Why Xbox Music Needs to Work

Xbox Music

(from Billboard Magazine, October 27, 2012) Last year, Microsoft faced an important question of what to do with its music service, Zune. Since the service was failing, the company had to either cancel it and become a technology platform for other music services like Spotify or Pandora, or make a huge investment to redesign and revive it. On October 16, Microsoft finally gave that answer. The company introduced Xbox Music on Xbox Live, the online gaming and entertainment center for the Xbox console, and will soon be releasing it on all devices running the new Windows 8 operating system.

Microsoft creating their own music service is crucial in the survival of Microsoft products. The company is in competition with other companies such as Apple, Google, Amazon, and Samsung and they want to set their technology apart from others with a leading music service. The company needs a service that can finally connect all of their devices together. A senior Microsoft executive asked the question, “Do we build it ourselves? Or do we get others like Spotify to provide that?” The company decided to build the music service themselves, so that they could create it exactly how they wanted it.

To offer the music service to its customers, Microsoft changed some of their rates for Xbox Live. They added a “freemium,” on-demand layer, and a scan-and-match locker service releasing next year. They also decided to make changes to the licenses, by changing the download-to-own store for a premium subscription service that will charge $10 per month. Microsoft also expanded the service and released it to 22 countries instead of 8, and will further expand to 35 next year.

So why is Microsoft putting in so much effort to create its own service instead of running through a third party? The decision allows Microsoft to move closer to the separation of Apple. Just like Apple having iTunes to increase sales in all its products like the iPod, Xbox Music will increase sales in all of Microsoft products. With one music service, customers can easily connect all of their content with all devices. It’s part of the change to make its 40 million Xbox Live users happier with their service.