Microsoft Goes After Online Music Market

11-18-03 Keavin
On Monday Microsoft confirmed plans to enter the suddenly crowded online music market. The Redmond, Wash., based company plans to offer their own version of a song-downloading service via their MSN division, taking on their biggest rival Apple Computer and the most notorious name in online music, Napster.

"We are excited to confirm that MSN will deliver a download music service next year, and we look forward to sharing more details at a later date," said Lisa Gurry, lead product manager for Microsoft's online division MSN.

Never shying away from a market that involves technology that they can dominate, Microsoft will enter a market place that has suddenly become rather crowded after Apple Corp’s iTunes proved earlier this year that the business model would work and people would actually pay a buck to download a song legally. 

Apple’s success was quite a coup considering the music industry’s bull headed reluctance to embrace the Internet. Apple seemed like a good bet to try out the business model because their service was only available to a small percentage of computer users.  When Apple succeeded with a quarter of a million songs downloaded on the very first day, a big light bulb must have gone on above the heads of executives in boardrooms across the world (not to mention the RIAA). “Huh, we can actually make money online with music?” 

Since then one company after another has entered the market. In October, Napster came back from the dead as a legal download service operated by Roxio Inc. Apple rolled out their PC version of iTunes. They have sold over 17 million songs since iTunes launched in April. And then you have Musicmatch, MusicNow, BuyMusic and RealNetworks' Rhapsody subscription service planning to start offering individual song sales. 

Other companies plan to enter the field as well with announcements from Wal-Mart Stores Inc., Sony Corp., Dell Inc. and Amazon.com.  Just what will Microsoft entering the market mean? It’s hard to tell at this point, but it is surely keeping some CEO’s up late at night. 

Solid details are not known at this point, we just know that contrary to previous pronouncement that it wouldn’t enter the market, Microsoft does now indeed plan to enter the downloadable music market with a target of next year. Whether they can get past anti-trust concerns is another matter that will have to shake out before any service emerges from Microsoft. 

What will set them apart from other offerings is anyone’s guess. Going by their track record in the software field, you might expect to pay for a song and instead get an inferior cover version that crashes your PC for no explainable reason.  But that is just pure cynical speculation that helped us fill up this article. 

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updated 2:19 PST 11-18-03