After filing a story yesterday for BWOL on Microsoft's expected launch of its own portable music player and improved music service, I spoke with another source who is well-informed about Microsoft's plans. And what he told me was the first thing I've heard that suggested the software giant might in fact have a promising plan of attack.
In a nutshell, Microsoft will focus on one of Apple's clear vulnerabilities: the relative inability of iTunes and iPod users to discover new music. Sure, you can share iMixes, but most iTunes users for the most part log on to buy songs they already know they want to buy.
The new Microsoft service, and the marketing to back it up, will likely focus on community-oriented capabilities--specifically, the ability for users to wirelessly "see" each others playlists and get a certain number of "free" streams of songs they want to check out. In other words, the WiFi capabilities won't be focused only on letting people satisfy the immediate, urgent immediate need to log on to some wireless digital music service--something that hasn't taken off, despite efforts of carriers such as Verizon and Sprint. Rather, the wireless capability will seek to exploit the most powerful "recommendation engines" around: your friends.
The source says this is the main topic of conversation between Microsoft and the music labels: how many of these free listens should consumers be able to get before they have to fork up some dough. As of now, the labels are far far apart on the answer to this question--just as they were on the question of usage rules for a la carte downloads before Steve Jobs convinced them to agree on how many copies a consumer could make and how many machines they could play it on.
Microsoft is not the only one taking this approach. MusicGremlin just announced a new service that lets users download music wirelessly to compatible portable devices and share songs. Another start-up, ZING, founded by former Apple hardware engineering executive Tim Bucher, just released similar technology. It's hoping to get other music services, retailers or even device makers to license its technology and devices. One feature: This ability to "zing" a song you like to friends.
All told, I'm still dubious about Microsoft's ability to do much damage to Apple's music empire. But targetting this "discovery" angle seems like the right way to go. Indeed, the source says that people who have seen Microsoft's plans say that “You may not be knocked out by the first iteration, but you’ll be knocked out by where they’re going.” Consumers can only hope Apple will be forced to respond.