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 $4.01 of your money until you buy another. And the point system is deceptive. Songs are priced at 79 points, which some people might think means 79 cents. But 79 points actually cost 99 cents. – Walt Mossberg, The Wall Street Journal, November 09, 2006
In stark contrast to Microsoft, Apple charges real currency. You buy a song from the U.S. iTunes Store for 99-cents, you pay 99-cents. You can buy one just one song, if you like, and you’ll be charged 99-cents. No left overs. No formulas. No “points” scheme. Just a single, simple, straight-up, honest transaction.
Zanny…um…
Grow up? Good advice. Much appreciated. But your name? Um… dude!? Pot, Kettle. Kettle, Pot.
Points, good luck with that.
Wonder if MS will have the balls to host everyone’s Points accounts on, say, a Vista server.
“JUST FOR GIGGLES, I’M GONNA GO DO THIS W/ IPODS BECAUSE STEVE JOBS SUCKS.
YOU MAC-HEADS SERIOUSLY NEED TO GET A LIFE!
I SEE MORE POSTS FROM APPLE TWITS AFRAID MICROSOFT ARE GOING TO TAKE AWAY ANOTHER MARKET FROM THEM. (BEING THE ONLY ONE THEY’VE SUCCEEDED IN IN THE LAST 20 YEARS, THAT’S UNDERSTANDABLE.)
GROW UP MAC-TWITS. YOU’RE GONNA GET STEEVED AGAIN, BUT BY BILL.”
—
Bill already deployed his golden parachute…..
He saw doomsday coming.
Vista, Zune, Zune Marketplace etc etc will be abominations / failures.
The fact that you typed all in caps tells me you should not be on the internet.
that or you have ALOT of pent up frustration from having to use M$ win(brainwashed)dows.
—
and to ‘points’…. you obviously havnt been to the apple store lately, they are stomping Dell and all other shit box builders into the ground with their lower prices.
—
Will the brainwashed MS douches ever learn? – We hope not.. HAHA!
wow, what a shock… Microsoft is ripping people off. Wait…
“Pros of the point system for Microsoft” (followed by various “advantages”)
But you, see that’s sort of the point.
The point system has plenty of advantages–for Microsoft. Most of the advantages of the point system you describe are for Microsoft. There’s lots of “Microsoft could do this or could do that.” But the reality is that Apple can do much the same thing and they don’t have to use a weird point system.
But my favorite line is “The point system is the same in different countries.” So what? If I live in England, my bank account has pounds and I’m quite comfortable with how much 79p is, even if most Americans have no idea if that’s a lot or a little without running to the currency converter.
But because I can’t shop at the European Store, it doesn’t matter. And before you go and say, “Well, with Microsoft, you can” no you can’t. The reason I, as an American, can’t shop at the European store has to do more with the copyright holders than any difficulties with currency exchanges.
As an aside, Microsoft is going to have a fun time with the points system. One difficulty if they start allowing real goods to be exchanged with points is they’re going to have crawl through the Patriot Act and make sure that people aren’t laundering money using their system.
Wow, the though that you might leave a cent or two sitting in your Microsoft bank account has got some of you really riled.
1. That’s not the “point” and probably not the case. Unless one always buys music in lots of 5, 15, 25 or 50, a lot more than a few cents will be drawing interest in the MS accounts.
2. There is the psychology of pricing. Things are priced in the XX.99 format for a reason; an item costing say 14.99 seems much cheaper than one costing 15.00. The point system goes beyond this. It uses the same psychology, but does so by putting up a smoke screen in the form of a point system. So a song costing 79 points appears to be cheaper than one costing 99 cents, even though it is not. While this a fair enough business practice, it is a slap in the face of consumers interested in making transparent comparisons among competing goods and services.
Been there, done that: Flooz.
Didn’t work then, won’t work now.
PETER
Yeah. I, I, I…Listen, that virus you’re always talking about. The one
that, that could rip off the company for a bunch of money…
MICHAEL
Yeah? What about it?
PETER
Well, how does it work?
MICHAEL
It’s pretty brilliant. What it does is where there’s a bank
transaction, and the interests are computed in the thousands a day in
fractions of a cent, which it usually rounds off. What this does is it
takes those remainders and puts it into your account.
PETER
This sounds familiar.
MICHAEL
Yeah. They did this in Superman III.
Why they cant use the good old trusted and working method of a ‘credit card’ (like EVERY other online store!) is beyond me.
Microsoft now considers itself soooo important that it creates it’s own currency.
Next step: ‘USA uses M$ Points instead of Dollars’.
Shame no one is buying the XBox 360! and looking at the news at the weekend, people are queuing for miles at stores selling the PS3 to snap one up.
In the UK the stores cant give away XBoxes – no one wants em. I think the total UK sales every month is around 5000.
2007 prediction: Xbox is recalled due to low sales figures.
re: “1) Go to [insert big name retailer here].
2) Buy a Zune
3) Open the box (ensuring it can’t be resold as new).
4) Then return it for a refund.
5) Repeat [at different retailer] “
JUST FOR GIGGLES, I’M GONNA GO DO THIS W/ IPODS BECAUSE STEVE JOBS SUCKS.
YOU MAC-HEADS SERIOUSLY NEED TO GET A LIFE!
I SEE MORE POSTS FROM APPLE TWITS AFRAID MICROSOFT ARE GOING TO TAKE AWAY ANOTHER MARKET FROM THEM. (BEING THE ONLY ONE THEY’VE SUCCEEDED IN IN THE LAST 20 YEARS, THAT’S UNDERSTANDABLE.)
GROW UP MAC-TWITS. YOU’RE GONNA GET STEEVED AGAIN, BUT BY BILL.
——–
And what drugs are you currently taking btw???
Zune will be the most disappointing Microsoft product since Vista.
[Enter: “0 days since last accident” sign here]
I wonder if this will finally get people to stay clear of the falling giant.
GotZuned.com
“Apple can do much the same thing and they don’t have to use a weird point system.”
Tell me how Apple will credit your credit card with loyalty “Dollars” that you can use to buy only songs, or easily set up bulk discounts that extend past a single purchase, or bundle the ability to a download a bunch of songs of your choice with the player, or have a prepaid limit on songs for download, without some idea of “credit”.
These all seem to be things that would benefit YOU.
In addition you already benefit because Microsoft charges a quarter of a cent less at 98.75 cents/song. Seems like you might be getting a part of that transaction cost improvement back. A benefit, not much admittedly, but when people are arguing about the interest on 4 bucks left sitting with Microsoft, there’s obviously some pretty tightwadded iPod users out there.
“because I can’t shop at the European Store, it doesn’t matter. “
If there’s enoough money difference in the price, people will find a way.
“While this a fair enough business practice, it is a slap in the face of consumers interested in making transparent comparisons among competing goods and services.”
Does anyone in this forum seem fooled by that? For that matter, when was the last time you saw anything priced at $14.95 and didn’t just round it up to $15 in your mind?
Points,
Apple can send you an email with a code for free song credits, as with their Pepsi and Slurpee promotions. There’s a button that says “Redeem” in iTunes. Have you used iTunes?
Bulk discounts are already available for corporations and they can do just about anything they want with their gift cards. If you have a band, they’ll make you custom cards to give out at your concerts that allow fans to download a few of your tracks specifically.
They already bundled a bunch of songs with the iPod when they first came out, However they realized as Microsoft soon will, people want to choose their songs, the included songs on the Zune are a joke. So yeah, a code for a CDs worth of free songs, they were called iTunes Samplers – did it. Again, have you used iTunes?
Have you heard of iTunes allowances, that’s what I use to have prepaid limits each month. It’s under “Buy Gift” in iTunes. One last time, have you used iTunes?
——
Saving a quarter (25 cents) on every 100 songs is hardly a price break. As for Microsoft, If 1 million people buy $25 worth of points and then buy 25 songs, that leaves Microsoft with $0.31 in the bank per person. Not only did those people not save any money, they spent over $1 per song. And, Microsoft now has $312,500 sitting in the bank. That’s how they plan to recoup the losses on the hardware sales.
Now you’re arguing about the 4 bucks… That’s $4 million that Microsoft is getting for free while we’re making nothing on our money… Microsoft knows what their doing, hopefully your not to dense to see it. It’s like the Office Space scam where they dump fractions of pennies into their own bank account.
… and how fscking long do you think they will keep each and every song at 79 points?
… about (quick, how many days until the day after Xmas?) 33 by my calendar. Then you are going to see some really wierd sh!% .
Because if Clay Aiken decides that his next #1 song should be 83 points, because he’s ‘worth it’ , then you will see all of the other superstars start the same antics. And don’t get me started on the independant labels or start-up labels.
Think this won’t happen? How many business units, sub-department committees, inter-ERP research boards, Poly-AnA managment heads and other illigitemate supervisory toads will have their finger stuck inside the pie that is called zune? yeah, I don’t know either.
But at Apple, there is this guy named Steve. When he says no, that’s it, end of story. Rarely does he go back on his word. When he does it’s 15 years later and always for the benefit of the Consumer.
You no longer just pay 99 cents for a song on the itunes store. You have to pay tax. So if I buy a $25 itunes music card from a Department store I pay about $26.50 including the tax. Now I go home and want to purchase a song for 99 cents that song will cost me $1.05 with tax. That $25 card that use to get me 25 songs now only gets me 23 with 80 cents left over. That 80 cents is left in my itunes account until I fork over more money to buy a new card which starts the process all over again or use my credit card.
So you end up paying more for a song.
“That 80 cents is left in my itunes account until I fork over more money to buy a new card which starts the process all over again”
You also have the ability to buy an additional song, spending another 19¢ (OK, maybe 26 or 27 with the tax). So, compared with the zune left-over-pennies model, you’ve got a song for a quarter. Bonus!
Come on, ‘fess up; you work at the Zune marketing department, don’t you.
In amongst all the “advantages” is one very real disadvantage, which you mention in a throwaway parenthetical phrase: “(or conversely raising the price)”. There it is, Microsoft can keep song prices at 79 points, thus seeming to be stable, and cheaper than iTunes, while ramping up the cost of points. $5 for 400 this year, $6 next year, etc., etc.
So I just read on some other site that people are getting error’s while installing the software and they can’t install it. They bought it early because bestbuy was selling them already. Kind of funny that it already isn’t work for some people.
PalmerDeville.
there-their-they’re. There they are. Their things are great. They’re coming.
MW-things. As in – words mean things. Especially if used properly.
Passport, points, activation, squirt….all really, really puerile ideas. A Microsoft employee must be as welcome in a party as a Jehova’s Witness. Come on, guys, cash in your options and get a real adult job!
Zuned Again!!!
Can any body help this guy install his Zune software? No?!?
{burns}
Excellent.
{/burns}
-c
MW: ‘range’ (the nearest Zune user is: 1,700 miles away)
“choose their songs”
See I’m talking about giving away POINTS to let you choose songs, not giving awy fixed pre-determined SONGS.
“Saving a quarter (25 cents) on every 100 songs is hardly a price break.”
Agree which is why missing out on the interest on 31 cents isn’t a big problem either.
“Microsoft knows what their doing, hopefully your not to dense to see it.”
With their billions in the bank, I doubt the whole points thing is a just a scam to earn a few more dollars interest.
“That’s how they plan to recoup the losses on the hardware sales.”
Sure, they have 312k held in trust per million zunes. Lets say they earn 10% a year on that for a total of $31k they get to keep. I guess they can subsidize every Zune to the tune of 3.1 cents. That’s so much money. You’re so smart, you should get a job providing strategy for a company like Microsoft.
“and how fscking long do you think they will keep each and every song at 79 points?”
And why should they? Charging the same price for every song is a dumb idea. most people understand that old music or music from less popular artists should cost less.
My God! The Zuned Again link is too funny! And way too ironic!!! MDN needs to copy that page and host it here! It’s a riot.
I’ve had to suffer through way too many pimply faced kids trying to figure out how to make change for me to not understand why Microsloft did the point thing. If we can ever find out how many left over points just end up unused we would be shocked. Too many of those kids will put in their credit card number – spend five dollars, buy a couple of songs and do the exact same thing the next time. Never realizing they are actually paying $2.50 per song. And not caring a bit either since it’s dad’s credit card.
Wow-can’t wait to tranfer all my MS Playforsure to the zune. What…I can”t? Well, at least I can share my own tunes, the things I make myself. What…I can’t?!! This will be compatible with Vista or at least better than iTunes-right? You can’t even run the zune software on Vista! The zune will make an alright dedicated hard drive for files won’t it? No!!! If anyone thinks the zune is an answer to iPod conformity they are either profoundly delusional or a MS shill. Between the Nazi style DRM, the WTF points scheme and the general uselessness of the zune soft & hardware, only a dope would buy this offering.
Be clear the zune will fail and spectacularly at that. Presently-on Amazon the most popular zune is ranked lower than 50 in sales. Number one-the iPod. It will not and cannot become anything more than a testament to Microsoft’s incompetence which fortunately out strips their evil propensity towards domination, greed and veneration of “the man.”
I’ll be keeping my “conformist” iPod until something better and cheaper comes along. Hasn’t happened yet, and if it does, it won’t be those chuckleheads at Microsoft.
BTW: Once Microsoft has taken a genuine bath for this blunder they’ll be out of the market in about 18 months. How stupid will those zune owners feel then? Come to think of it, if they were daft enough to buy one of these POS in the first place-they’ll likely still be patting themselves on the back.