Microsoft’s Zune Marketplace will sell individual songs for Windows PCs and Zune digital media players “through a system called Microsoft Points. The new Microsoft cash system will work by adding money to an account, as with a prepaid phone card. Points will then be deducted from the account with each purchase. A single song will cost 79 points, ‘the equivalent of 99 cents,’ according to Microsoft spokeswoman Kyrsa Dixon,” Candace Lombardi reported in late September for CNET News.
Lombardi reported, “The point system is already used in the Xbox Live Marketplace, and Microsoft plans to host other online stores where Microsoft points can be redeemed, according to Katy Gentes, product marketing manager for Zune. In the United States, points are available in denominations of $5 for 400 points, $15 for 1,200, $25 for 2,000 and $50 for 4,000. That makes $1 worth about 80 points.”
Full article here.
MacDailyNews Take: Several MacDailyNews readers have suggested that we do the math, so here’s the deal:
• 79 Microsoft Points equals 99-cents or one song.
• The smallest amount of Microsoft Points available for purchase is $5.00 or 400 points.
• Each Microsoft Point is worth 1.25-cents.
• So, you give Microsoft your $5 and buy your 5 songs. That’s 395 total points. Microsoft has your 5 points or 6.25-cents “left over.”
• Say you want an album’s worth, or 10 songs? You give Microsoft $10 for 800 points and buy 10 songs for 790 points. Microsoft has your 10 points or 12.5-cents “left over.”
• See where we’re headed? Microsoft is taking money from their pigeons, er… “customers” and placing it in an interest-bearing account to earn themselves more money on their generous customers’ interest-free “loans.”
• Now, if you don’t wish to give Microsoft your money to use for free to generate interest income for Microsoft, you need to figure out exactly how many 79-point songs to buy, so that no points are left over. The magic formula to avoid giving Microsoft a free loan is 79 points x 400 (smallest denomination available for purchase) = 31,600 points or 400 songs at 79 points each. Total cost: US$395. Not very practical, is it?So, the real point is clear: Microsoft’s “points” are designed to confuse consumers and generate interest income from “left over” amounts. Now you know exactly why “1 Microsoft Point” doesn’t equal “1 U.S. Cent.” Boy, if Microsoft can dupe enough people into this Microsoft Points scheme, those “left overs” will really add up.
To buy even a single 99-cent song from the Zune store, you have to purchase blocks of “points” from Microsoft, in increments of at least $5. You can’t just click and have the 99 cents deducted from a credit card, as you can with iTunes. You must first add points to your account, then buy songs with these points. So, even if you are buying only one song, you have to allow Microsoft, one of the world’s richest companies, to hold on to at least $4.01 of your money until you buy another. And the point system is deceptive. Songs are priced at 79 points, which some people might think means 79 cents. But 79 points actually cost 99 cents. – Walt Mossberg, The Wall Street Journal, November 09, 2006
In stark contrast to Microsoft, Apple charges real currency. You buy a song from the U.S. iTunes Store for 99-cents, you pay 99-cents. You can buy one just one song, if you like, and you’ll be charged 99-cents. No left overs. No formulas. No “points” scheme. Just a single, simple, straight-up, honest transaction.
I do think MS was largely or at least partially motivated by reducing transaction costs. I’m sure Apple would love to save those costs by billing your credit card for larger amounts less often. But they didn’t. Why? Because they were putting ease-of-use and market development first. They absolutely wanted you to be able to buy just one download for just 99 cents.
That’s the thinking that built this market.
My house and office is actually two separate buildings. I bought a iTunes download once because I didn’t feel like going to the other building and finding a song I really wanted to hear. It was only 99c!
$5.00 is a whole different threshold. And points are a layer of complexity. Sorta sounds like MS…
Easy!
You want to buy zero (0) songs for your never-to-be-purchased Zune.
Now, in order to buy zero (0) songs, you’ll need zero (0) points, which will cost you zero (0) dollars, zero (0) x zero (0).
Not only doesn’t you leave any left-overs, zero (0) x zero (0) equals zero (0) left-overs, but you also saves zero (0) dollars! (yeah, well, because zero (0) songs times zero (0) dollars is zero (0) – do the math yourself!)
Anyways, what is saved is earned!
Therefor the formula is:
Earned = Saved x (MS Product / MS Points + MS left-overs)
Nashlore:
I think you just divided by zero!
“The dock and earphones cost $40 each”
I can’t find anything anywhere that states you get any earphones, dock or USB cord with it. I went to http://www.zune.net/en-us/meetzune/device.htm , and nothing!
There are no photos or specs stating what you get in the box. Interestingly, all of the photos on Microsoft.com exclude any hint of any connection cord or dock.
Does it cost an extra $40 in order to connect it to the computer?
simon:
a cable and earphones are included:
http://www.engadget.com/2006/11/12/stores-selling-zunes-early/
For those that think there isn’t much difference between the Zune and iPod, other than size of the devices, compare the tech specs…
http://www.zune.net/en-us/meetzune/device.htm
http://www.apple.com/ipod/specs.html
For example…
Languages:
iPod – Czech, Danish, Dutch, English, Finnish, French, German, Greek, Hungarian, Italian, Japanese, Korean, Norwegian, Polish, Portuguese, Russian, Simplified Chinese, Spanish, Swedish, Traditional Chinese, and Turkish. Additional language support for display of song, album and artist information – Bulgarian, Croatian, Romanian, Serbian, Slovak, Slovenian, and Ukrainian. With support for display of multiple languages and characters simultaneously.
Zune: – English
Go here…
http://www.apple.com/ipod/features.html
…click on each item in the list on the left side, watch the whole animation, then tell me that the Zune is similar to the iPod!
Zune:
Music – Yes
Photos – Yes
Movies – Yes, but none available
TV Shows – Yes, but none available
Podcasts – No
Audiobooks – No
Games – No
Calendars – No
Contacts – No
World Clock – No
Screen Lock – No
Stopwatch – No
Fewer options/features in a much larger case is old technology, and should cost significantly less, much like the current value of the 3rd generation iPods.
FED UP WITH MSBS,
Yes, M$ has a culture — a vampire culture. They are a company based on shafting everybody to win — a massive win/lose/lose/lose … culture. They screw over their customers, partners, acquisition prospects and competitors with unethical and often illegal tactics.
Consumers reports have recently obtained some production samples of the zune and analyzed the case material. It is made out of a unique virtually indestructible material from Uranus corp It. It turna out that the reason it is offered in brown is that is the natural color of the material the other colore (white and black) are tinted.
If Zune Marketplace restrictions and the math are correctly interpreted, a user would have to spend in increments of $395 at Zune Marketplace to breakeven otherwise give Microsoft an interest free loan. Just when you thought you had witnessed the worst possible scenario, Microsoft lowers the bar even further and craps on its customers…again.
Unfortunately M$ allowed let the “cost effectiveness” accountants loose on Zune before they even had a market share.
I have recently seen the “Smartest Guys in the Room”. The movie about Enron. This looks like something those guys would pull. Already cutting features because they are over confident of their market share….that they don’t have….Who does cost cutting accounting on Vapor-Ware? This is somethiing not even M$ has ever done. I forgot what the Enron guys called this…countiing profit under Mark to market conditions…i.e. counting chickens before the eggs are even laid.
M$ announced that Vista is done…it probably isn’t. They are just realizing that they need to get the product out so they do not fade into obscurity. They realize that they need a new cash cow to fund the “dumbass” Zune idea. Too bad for them that Wii and PS3 come out very soon….Bye Bye XBox 360’s market share under uncontested market conditions.
Someone needs to tell Ballmer that it is time to put down the violin and get back to work.
Just my $0.02
P.S. When does the Mac Pro Quad come out? I almost havee enough saved…
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It just struck me that the right metaphor for M$ is the W.C. Fields’ movie character Larsen E. Whipsnade, who advised, “Never give a sucker an even break or wise up a chump.” That is the credo of M$ — the essence of their evil soul.
It seems to me that if the tax is more than a penny, then $5 will only allow you (sorry, I meant someone who might actually own a Zune) to purchase 3 tunes.
All this is only applicable to the USA. The rest of us will be spared all the bullshit. Initially!
We will sit back and see how many numpties (People with nothing in their heads) there are who actually go out and buy one of these pieces of crap and then go through all the rubbish you guys have just posted here to try and get a lousy song on the thing.
Please AMERICA, don’t buy the bloody thing, so M$ drop it as a very bad idea and save the rest of the world from the possibility of this thing getting out of your borders.
Act now, spend your Xmas dollars on an iPod.
Leo
Hey Peterson– where’s your outrage against Microslop? Let me guess: you had laryngitis once?
Notice how Microsoft has to bribe its way into the market. Zune hasn’t even proved itself and there is already accessory makers going nuts with gadgets. Basically Zune won’t earn its market position, but rather but it via Microsoft evil money!
They’re aiming for the same bonehead360 group of kids. These points are great mom, can you get me more?
Hey, folks,
Lots of you seem to be missing the point here: I have no problem with MS (or anyone) choosing to use a point system rather than a real currency to do their transactions. The issue is that they’ve chosen a large prime number for their system, making it impossible to purchase a round number of songs/points for less than the $395 amount noted above.
If they used 100 points = 100 cents (or .84 Euro, or whatever), and charge 100 points/song, then we can purchase tunes and not have leftovers for them. Or heck, even just make the points blocks available in multiples of 79 if that’s the value they want to use. But of course charging in straight-up multiples would be respectful to the customer and we can’t possibly have that now, can we?!
Microsoft has a secret death wish. And I am in not so secret concurrence with them.
“1.A large majority of people in the world don’t own credit cards or debit cards.This eliminates that barrier.
2.Those points will be used for marketing promotions and prizes in the future.”
I’ve read these two points on another forum. They didn’t make any sense then and they don’t now.
1. Being able to buy a card with CASH eliminates this problem. Having a points system has nothing to do with lack of credit or debit cards. This is no way justifies using a points system. Using the magic of common sense, Apple sells cards for iTS which you can buy using cash that have currency values (of course, you still get the left over value problem here, don’t you?). No need to do any conversion. Also, why make EVERYONE do it this way? Why do people with credit and debit cards have to use this silly system?
2. This is also have nothing to do with points. Why require everyone to be involved in these promotions and prize giveaways? This is the equivalent of “no opt out”, which is irritating. You could have a cash system and allow people to convert their extra cash to point for the purpose of prizes or giveaways.
I understand having a card as an option, buy requiring everyone to pay for more than one song at a time and to add the inconvenience of having to do a conversion calculation for every purchase is basically giving the finger to the consumer. Neither is a big deal, but both are the minor nuisances that irritate consumers.
The points system is representative of thought process at MS. The concept of “ease of use” never enters into this way of thinking.
“Consider it a mini paypal account within MS. I’m a mac person, but I’m just looking at this from a sensible business perspective”
Again, this has nothing to do with using POINTS.
99¢ divided by 79pt = 1.25316455696
So 1 point equals over 1.25 cents. Right?
“>It gets worse. Apple charges my local sales tax on my iTunes purchases.>NOT TRUE!!
I bought 1 tune in Cal. from the Apple store. My credit card was charged 99c. I did it specifically to check the total cost of 1 tune.”
FACT: New Jersey has a download (iTunes) sales tax
Reading all this math got me confused and now…. SQUIRT!
I thought this had already been figured out- it’s $495 which gets you 500 songs, not including any sales tax of course.
How does Microsoft pay their employees? In points?