Microsoft, MTV target Apple’s iTunes Music Store leftovers

“Despite years of trying, Microsoft’s digital music strategy has played second fiddle to Apple. Devices from such partners as Creative Labs and Dell barely register sales next to the iPod. And online music services from Napster and Wal-Mart haven’t slowed Apple’s iTunes,” Jay Greene writes for BusinessWeek. “Microsoft added yet another partner on Dec. 13, when MTV announced plans to launch its own online music service, called Urge, using the software giant’s technology.”

The new president of Microsoft’s Entertainment & Devices division, Robert J. Bach said it was “an option” for Microsoft to build its own digital media device to compete with the iPod, though he cautioned that doing so could drive Microsoft’s partners out of the market and limit consumer choice, according to Greene’s report.

Full article here.
Consumers have already chosen.

A reminder that MTV already has a music service online (in partnership with MusicNet since 2004) which also hasn’t slowed Apple’s iTunes. Both Microsoft and MTV have already proven to be failures vs. Apple in the digital music market when working alone and in partnership with others. So, what does the combination of Microsoft+MTV yield, besides a double-sized failure? MTV has already stated that the new service is not targeting iPod and iTunes users. They’re going after Apple’s table scraps. Look out Yahoo, Real, Napster, and whatever other also-ran services are still left scattered around.

To us, this MTV deal seems like nothing more than Microsoft’s stab-in-the-back-payback to Real.

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Related MacDailyNews articles:
Microsoft-MTV ‘URGE’ may interest antitrust regulators; Anti-iTunes labels Sony, Warner back ‘URGE’ – December 14, 2005
MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure? – December 13, 2005
MTV and Microsoft team up for new digital music service ‘URGE’ – December 13, 2005
Microsoft developing Microsoft-branded competitor to Apple iPod? – December 08, 2005
Motley Fool Take: MTV, Wal-Mart will leverage brands to beat Apple iTunes Music Store – May 10, 2004
MTV jumps into Apple iTunes-dominated online music service fray – May 07, 2004
Digital music panel: Apple could become the MTV of the record industry – March 31, 2004

19 Comments

  1. When will these companies learn that repeatedly launching services with different names and logos isn’t enough. They have to be good. Admittedly they can’t work with the iPod because Apple won’t open them up but all that means is they have to work twice as hard, create an interface which is better, more useful etc etc.

    Calling something an iPod/iTunes killer doesn’t make it so.

  2. They (MTV, MS) may say they are not going after Apple but you know they really are.

    They are just hedging their bets so that when they get their butts kicked by Apple they won’t have egg on their face.

  3. The fools. If Microsoft actually worked very closely with, say, Creative and got what amounted to a closed system going, they could gain some momentum.

    Then, of course, they would have do the same for everyone else or fight lawsuits from all of their other partners.

    But, no, Microsoft and their partners work like a collective, like the old USSR.

    Everyone is equal until Chairman Bill says otherwise.

  4. Are all these press releases just attempts to get mentioned on the various morning shows’ “gadget gift idea” spots? Because you know the iPod’ll get top billing, but whatever talking head is shilling will need to offer us “alternatives” so they sound less like a shill.

    As noted above, these partnerships have no chance of succeeding in the marketplace, so what other point could these announcements have?

  5. exactly, the best bet is to go against their partners?! this has NEVER worked for bill, and frankly, it barely worked for windows.

    why did it work for windows? because businesses like having multiple hardware vendors.. they can pit them against each other and use that to negotiate fair deals. It’s the same reason Coke doesn’t own 100% of the soft drink market.. Pepsi is the leverage…

    Now, I’m very strongly implying that MS rules the business market, and the home market is just a side effect of that, an afterthought.

    To consumers, sure, it sounds like having multiple hardware vendors (still talking about Windows) is a good thing, and generally it has the same effect.. hardware quality goes up because of competition, prices go down.

    Mac users are pretty much at Apple’s mercy when it comes to pricing.

    Now let’s look at the iPod. First of all, there is no business market. This is not a business decision by IT managers, it’s people. That’s the first strike against MS. Next, it’s stylish and sexy. That’s the next strike against MS. Next, it’s a fluid integration of hardware and software. Again, a huge strike against MS.

    MS better find a way to make people locked into WMP or it’s going to be a long painful few years for them. The veil over Apple’s Mac lineup seems to have been lifted by iPod.. and the numbers don’t lie. Switchers are mounting, and the cloud of ignorance is beginning to clear

    Since I mentioned the fluid integration of hardware and software, MS may not have a play in this at all, beyond BUYING one of the latest WMA hardware makers and bringing into the fold. You’ve got to compete with Apple head-on.

  6. Macfan – The iTunes music store at #1 is barely profitable. These other music stores are not even profitable. I am not sure what these other companies even came up with a business plan.

    iTunes Music Store = Ease of use for iPod owners – store profit secondary to keeping people buying and upgrading iPods.

    Other music stores = Everyone else is doing it so why don’t we. Comparable to the Internet boom then bust.

  7. I wouldn’t be so quick to bet against Microsoft. I’ve been reading this story with interest over the last couple of days… I really think this could be “the big thing” that may bring down Apple & iTunes. MTV is a gigantic global brand that kids worship. I do believe, and have always believed, that Steve Jobs’ close-minded approach to partnerships is his weakest link. He should have made FairPlay’s DRM a standard in the industry instead of just keeping it closed to himself. If he made it a standard, then MTV could’ve been partnering with Apple! Does Steve Jobs really think that the other competitors would just sit back idly & watch Apple take control of the market? Did he really think that people would let him have this market all to himself? Same thing happened with computers — oh sure, all these other hardware companies are just going to close down because they can’t get Apple’s OS. No, they’re going to look for alternative OSes to run on their boxes. Same thing with these music stores… are they really going to close up shop because Apple won’t let them play their music on the iPod? No, they’ll find ways to make it work, and they’ve already gotten loyal followers. Make no mistake: Apple is the company here that is not playing fair; it’s not the other way around. I’m the #1 biggest Apple fan you will ever find and have the Macintosh sales numbers to prove it, but that doesn’t mean that I am an Apple apologist: Apple is being the bully who will ultimately lose in the end from their closed-mindedness here. Microsoft has a history of taking over the dominant players: They took over the once 95% marketshare dominance that Netscape had, they took over the 30% marketshare that Apple once had in operating systems, they have basically taken over just about any market they have ever set their sights on. If Steve would have opened up his format to all the other music stores, he wouldn’t be in this boat right now where people are trying to bring him down (and will eventually succeed). Instead, all of these music stores would GLADLY be playing along with Apple & the iPod. But no, Steve Jobs is the kid in the sandbox who wants it all to himself. That’s not how the world works — it’s not going to happen. If he opened up his sandbox, ironically he would be the one in control for eternity b/c everyone would gladly play in his sandbox. Apple needs to PLAY FAIR as their DRM’s name “FairPlay” implies.

  8. SR

    You seem to forget, it is not SJ taking control it is consumers flocking to the solution they want. The DRM is in place only because the content providers insist on it, and frankly if the “others” want their music to run on iTunes/iPods they can offer it in a format that will play. This is all smoke and mirror to pressure Apple and make them look like the bad guy, the pressure is really to get Apple to open up Fairplay because then the game is over and Apple will have lost. BTW, MS may have lots of money but they have lost considerable “capital” with their bullying, monopolistic attitudes and their virus-ridden bloatware. People are waking up and abandoning the sinking ship.

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  9. scott gets it wrong: apple has no need to “open” its digital rights management to anyone. the whole point of apple’s cache’ is that everything is apple; everything works together. what sense is made by having anything apple develops be made to work with the dregs of the ‘doze world? if one wants the slickness that is apple, get a mac, get an ipod, etc. so far, Local Leader Steve J has been spot on; apple is doing better than anything little billy ever saw in any crack-induced dream. there is not the slightest reason for apple to “play fair”; apple is out front, this time. apple has arrived at that position all on its own; it has no need to accomodate any of the other also-rans.
    just as they didn’t allow apple to play in their sandbox, so now they can be the outsiders. if you want the benifits that apple provides, dump the ‘doze box and step out into the light.

  10. Scott, Scott, Scott . . . that’s soooooo backwards. Are you sure you’re the real Scott Rose? Because you sound a helluva lot like a Microsoft manager on a coffee break.

    Local Leader Steve J. has done everything right thus far. billysmom is correct: When there are plenty — plenty — of other options for the consumer to buy, collect, categorize and listen to digital music, why in the hell should Apple open anything up to its competitors?

    WHY?!?!?!?!?

    Just because the competitors say so? F-ck them! They’re c-o-m-p-e-t-i-t-o-r-s . . . the competition . . . and what do you want to do to your competition, in any arena?

    DEFEAT THEMMMMMMMMM!!!!!!!!!

    Hey, Scott — Get back to us when you put together a scientifically-valid survey that demonstrates that consumers — the end user . . . you know, the ones who matter — are frustrated and pissed off because of Apple’s “closed system” (that just happens to work perfectly!). I’ll be counting the hours on my seven Relnackian fingers.

    In the meantime — Boo-frickety-hoo. Local Leader Steve J. is da bomb. No missteps here, at least not yet. Now let us get back to our music listening here at the headquarters on Relnack.

    And kindly return to your administrative duties there in Redmond.

  11. Scotty boy,

    If Apple does lose this time it will be to a better system and, if that happens, we all will benefit.

    Just imagine, a better system than iPod, iTunes, iTMS. That would be one kick-ass system.

  12. Look, I hope you guys are right. I want to see Apple win this war, and I want Apple to be the ONLY one standing in the end. I hope that Apple always remains on top here. iTunes + iPod is the strongest, best, easiest-to-use, simplest, most integrated music system that we have anywhere in the world today.

    But is it possible that it’s too early to declare victory based on the current strategy? I totally agree that the end user is flocking to the iPod right now, and that NOBODY is complaining about the beautiful SYNCHRONICITY between the iTunes & the iPod… but Napster actually has a very loyal following, too. And I imagine that MTV might have a very loyal following as well. (Of course, if all the consumers buy their music from those stores and then burn their CD’s & re-rip them into iTunes, Apple STILL wins!! Hee hee.)

    With all the millions of iPods sold and with all of the iPod accessories worldwide and with all of the iPod-ready cars being made, it looks like nothing will topple Apple. I like that type of a world. But I don’t want us to get blindsided by something that we didn’t think was a threat at first.

    I see what you guys are saying, though: You’re saying that as soon as Apple DOES open up the FairPlay DRM to competitors, they have lost the game because they’ve given away the crown jewels… which is the prize that everyone wants right now. Let’s hope you’re right. We’ll all be watching this play out over the next few years.

    FUDsucker proxy, above, says: “The DRM is in place only because the content providers insist on it, and frankly if the “others” want their music to run on iTunes/iPods they can offer it in a format that will play.” But is this really true?? Yes, the music stores have to put DRM on their music because the studios require this, but there’s no DRM that the iPod can play BESIDES FairPlay. But I understand what you guys are saying — you’re saying that if Apple opens up the iPod to play Windows Media Player’s DRM files, then they have ALSO lost the game in more ways than one.

  13. Scott, you need to read MDN’s take. MTV already has a music service. If MTV’s brand brings so much power to the table, this service should at least be fighting for #2, giving Napster and Rhapsody a run for their money. Instead, it’s not even a blip on the radar.

  14. The only way for anyone to beat APPLE is for them to come out with something better – SIGNIFICANTLY BETTER.

    APPLE built a GREAT “car” and gave away the “GAS” as a loss leader.

    Anyone who wants to sell GAS has to sell it for very little margin.

    MW: Earlier – as in, MW needed to figure it out earlier.

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