MusicMatch CEO: HP, Apple music pact ‘a tactical mistake for HP that will mushroom into a strategic

“When purchasing a personal computer, buyers used to grapple with the decision: a Macintosh from Apple Computer or a Microsoft-based PC? Microsoft effectively won that operating system debate years ago and claims more than 90% of the PC operating system market,” Jefferson Graham writes for USA Today. “But in the push to legally sell digital music, Apple and Microsoft, and their incompatible file formats, are at it again. Consumers are in the position of having to choose as hardware makers line up behind either Microsoft or Apple’s software format.”

“Hewlett-Packard’s recent surprise decision to snub longtime PC partner Microsoft and offer Apple music software on its PCs shows how unpredictable this battle may be. ‘Microsoft lost the first round of the digital music war,’ says Phil Leigh, an analyst with research firm Inside Digital Media. Apple’s iTunes software ‘was good enough to persuade (H-P) … to switch. That’s huge,'” Graham writes.

“For now, Dell, which battles H-P for PC market share dominance, promotes music in Microsoft’s Windows Media Audio (WMA) format on its computers – as do most Windows-based PCs,” Graham writes. Likewise, most portable music devices sold today – with the exception of Apple’s best-selling and acclaimed iPod – use Microsoft’s format. That means consumers who use portable music players and buy songs from Apple must use the iPod; consumers who purchase from non-Apple online music stores must use portable devices based on Microsoft’s format,” Graham writes.

“Scott Kauffman, CEO of MusicNow, thinks owners of H-P PCs are going to wonder why their iTunes songs can’t go onto all of their Best Buy devices. ‘This is a tactical mistake for H-P that will mushroom into a strategic blunder,’ he says. ‘It’s the single biggest complaint we get in customer service,’ says Dennis Mudd, CEO of Musicmatch, another online music store and software maker: ‘Why can’t I move this song to an iPod?’ Mudd also says that H-P is in danger of promoting future sales of Apple Macs – by promoting Apple software on its own PCs. That could hurt its own PC sales,’ Graham writes.

Full article here.

45 Comments

  1. ‘This is a tactical mistake for H-P that will mushroom into a strategic blunder,’ he says. ‘It’s the single biggest complaint we get in customer service,’ says Dennis Mudd, CEO of Musicmatch, another online music store and software maker: ‘Why can’t I move this song to an iPod?’

    This is a very funny, and very telling of how out of touch the heads of these other online ventures are. All of his customer service problems would be solved, if MusicMatch would support AAC. Then again, HiPod users will have the iTMS to shop at soon anyway, so his analysis doesn’t really matter anyway.

  2. Last time I checked, the iPod plays mp3 files which are what most people have sitting on their HDs from their Napster (1.0) and Kazaa downloads. The fact that iPods cannot play WMA files hurts it far less than it hurts other players that they cannot play AAC files seeing as how Apple has 70% of the paid download market these days with the iTMS. This is just more sour grapes seeing as how the MusicMatch store has been such an abysmal failure to this point…

  3. CEO of MusicNow thinks HP customers will wonder how come their music won’t work on Best Buy Devices.

    CEO of MusicMatch says the biggest customer complaint is why their music won’t work on the iPod.

    Seems like the HP-Apple deal will solve the biggest customer complaint.

  4. Yes! This guy just doesn’t get it. If his customers are complaining that they can’t move their music to an iPod, then they must be buying iPods! Duh! But somehow this isn’t his fault. He sounds like the guy who wants leniency for murdering his parents because now he is an orphan.

  5. “It’s the single biggest complaint we get in customer service,’ says Dennis Mudd, CEO of Musicmatch, another online music store and software maker: ‘Why can’t I move this song to an iPod?”

    That statement just goes against everything Mudd was trying to say. If your biggest question on your support line is that…doen’t that tell you something. Change your friggen files to AAC and Fairplay, so your customers are happy!

    Good choice HP! Nothing but the best.

  6. ‘This is a tactical mistake for H-P that will mushroom into a strategic blunder,’ he says. ‘It’s the single biggest complaint we get in customer service,’ says Dennis Mudd, CEO of Musicmatch, another online music store and software maker: ‘Why can’t I move this song to an iPod?’

    And because they already have the iPod, I doubt they’ll blame Apple for it. More likely, they’ll see the other providers as inferior since they don’t support the most popular player.

  7. Well the assumption that ALL PC users BUY nothing but WMA files or encode their CD’s in WMA format. BUT like some on here have said….most download the music in MP3 format (from BearShare or Kazaa) OR may have made MP3’s from the CD’s that they OWN.

    CD’s they own can be or will be encoded with the AAC/Fairplay file if they choose to redo them….or they can play their existing MP3 files after all we are talking about a NEW HP PC here with maybe a NEW HP iPod. I would say the user has about a 70% success rate with the music he or she has from their old computer.

    “Assumption is the mother of all fsck-ups.”

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