Microsoft Zune
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Wilhelm-Scream
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erf, no...if you google image search "wii" you will see the logo for the gayest word ever.Equint77 said:
jaguarr
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http://www.blackfriarsinc.com/blog/2006/10/zune-marketplace-pricing-too-cute-by.html
Tuesday, October 03, 2006
Zune Marketplace pricing: too cute by half
Pictures of dollars and cents
[Apologies for the delay in this posting; my blogging software (ecto) ate the original article I had queued up for this morning in the process of arguing via XML/Atom with Blogger.com, so I had to write it again from scratch. The original was funnier; somehow software bugs eliminate much humor.]
Writing articles about Zune marketing is about as challenging nowadays as writing about Republican political scandals. In the military, it would be called a target-rich environment. That said, here's another one.
Largely unnoticed in the pricing announcement last week was this little tidbit about how consumers might pay for Zune music. CNET had a pretty decent description in their article, where they accurately noted that Microsoft's real play is to get people to buy subscriptions for $14.99 a month. But if pressed, they'll generously allow people to buy individual songs. But you can forget one-click buying; Microsoft has a cuter idea:
There will also be the option of purchasing individual songs 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.
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.
Now from a marketing point of view, there are two marketing tricks going on here. First, is the concept of not having 100 points equal a dollar. That would be too simple and easy to understand. Instead, Microsoft sets the song price to 79 points, which most people will perceive as being inexpensive because it is less than 99. Cute, very cute.
The second marketing trick is the use of a new form of currency; yes, Microsoft money has finally arrived, and it has all the charm of an end user licensing agreement -- and just as many tricky parts. Note the denominations offered above and think about this common transaction: buying your average, garden-variety album for $9.99. You'll need probably 799 points to buy that. But notice that there's no 800 point denomination. Microsoft is betting that most consumers won't buy two 400 point packs, but will instead opt for purchasing 1,200 points for $15, and will leave the extra 400 points on account with Microsoft. So consumers end up either 1) doing extra work to pay exactly the right amount (i.e., going to the store, purchasing two 400 point packs, returning to the music purchase and then buying their album), or 2) provide an interest free loan to a company that has $40 billion in the bank. Cute, too cute by half.
Microsoft's seems to take particular glee in making consumers work harder than necessary to buy their products and grabbing every fraction of a penny they can squeeze out of the transaction. If the company spent half as much effort investing in, say, making a truly elegant hardware device (instead of just re-badging someone else's) and making the user experience simple and hassle-free with one-click credit card payment (it worked for Amazon, didn't it?), they'd probably make more money in the end than pinching pennies with tricky pricing and proprietary money schemes.
Someone once said that the lottery is a tax on people who are bad at math. Maybe Microsoft intends Zune Marketplace to be a tax on people who like marketing tricks. It might work, but it's no way to build customer loyalty.
Full disclosure: I do hold shares in Apple Computer.
Wow. What a crappy business model for music sales. I guess it wasn't enough that M$ had to screw over all their Plays For Sure partners and go with a completely incompatible format for Zune and their music store.
jag
Tuesday, October 03, 2006
Zune Marketplace pricing: too cute by half
Pictures of dollars and cents
[Apologies for the delay in this posting; my blogging software (ecto) ate the original article I had queued up for this morning in the process of arguing via XML/Atom with Blogger.com, so I had to write it again from scratch. The original was funnier; somehow software bugs eliminate much humor.]
Writing articles about Zune marketing is about as challenging nowadays as writing about Republican political scandals. In the military, it would be called a target-rich environment. That said, here's another one.
Largely unnoticed in the pricing announcement last week was this little tidbit about how consumers might pay for Zune music. CNET had a pretty decent description in their article, where they accurately noted that Microsoft's real play is to get people to buy subscriptions for $14.99 a month. But if pressed, they'll generously allow people to buy individual songs. But you can forget one-click buying; Microsoft has a cuter idea:
There will also be the option of purchasing individual songs 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.
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.
Now from a marketing point of view, there are two marketing tricks going on here. First, is the concept of not having 100 points equal a dollar. That would be too simple and easy to understand. Instead, Microsoft sets the song price to 79 points, which most people will perceive as being inexpensive because it is less than 99. Cute, very cute.
The second marketing trick is the use of a new form of currency; yes, Microsoft money has finally arrived, and it has all the charm of an end user licensing agreement -- and just as many tricky parts. Note the denominations offered above and think about this common transaction: buying your average, garden-variety album for $9.99. You'll need probably 799 points to buy that. But notice that there's no 800 point denomination. Microsoft is betting that most consumers won't buy two 400 point packs, but will instead opt for purchasing 1,200 points for $15, and will leave the extra 400 points on account with Microsoft. So consumers end up either 1) doing extra work to pay exactly the right amount (i.e., going to the store, purchasing two 400 point packs, returning to the music purchase and then buying their album), or 2) provide an interest free loan to a company that has $40 billion in the bank. Cute, too cute by half.
Microsoft's seems to take particular glee in making consumers work harder than necessary to buy their products and grabbing every fraction of a penny they can squeeze out of the transaction. If the company spent half as much effort investing in, say, making a truly elegant hardware device (instead of just re-badging someone else's) and making the user experience simple and hassle-free with one-click credit card payment (it worked for Amazon, didn't it?), they'd probably make more money in the end than pinching pennies with tricky pricing and proprietary money schemes.
Someone once said that the lottery is a tax on people who are bad at math. Maybe Microsoft intends Zune Marketplace to be a tax on people who like marketing tricks. It might work, but it's no way to build customer loyalty.
Full disclosure: I do hold shares in Apple Computer.
Wow. What a crappy business model for music sales. I guess it wasn't enough that M$ had to screw over all their Plays For Sure partners and go with a completely incompatible format for Zune and their music store.
jag
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spideyboy_1111
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I hate Ipods for the mere fact a new one comes out every 6 months
Anita18
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I made an effort to actually do my research when I bought a new mp3 player since I didn't want to have an iPod JUST for the sake of having one "like everybody else." I'm also incredulous that iPods don't have a radio receiver or a voice recorder, because even my cheap-o Acer mp3 player had both. I'm sure they have the technology for it, but they're just not putting it in for one reason or another. That and the fact that you have to send the iPods to Apple to properly get the battery replaced is ridiculous as well. (I know, I know, a lot of iPod users do it themselves, but people like my roommate would gladly pony up the money.) Or I dunno, maybe it's genius that they capitalize on people's ill-laid priorities.
Honestly, even though I'm an artist and I enjoy aesthetics, I don't see how having the iPod be super-thin negates the trouble of having to send it in to get the battery replaced (or the trouble of physically taking it apart). But I suppose it's because they're known for their super-thinness, and if they weren't that thin, it wouldn't be an iPod? Riiiiight.
My Sandisk Sansa (which I LOVE!) is the same size as a Nano, just a tad thicker. Not by much, though. I was able to alter a belt-clip case made for a Nano to fit my Sansa.
Just took a few snips. And...I can replace the battery myself. Whee!
Yes, I've heard arguments that Microsoft is the devil incarnate as a company, blah blah blah. But, it's very very hard to hate Bill Gates himself, considering all the good he is doing with his foundation. I have classmates who are going to Cambridge University on Bill Gates' money. His money is going to fund possibly my (and other fellow scientists') research on stem cells. Can't knock a guy for that.
Honestly, even though I'm an artist and I enjoy aesthetics, I don't see how having the iPod be super-thin negates the trouble of having to send it in to get the battery replaced (or the trouble of physically taking it apart). But I suppose it's because they're known for their super-thinness, and if they weren't that thin, it wouldn't be an iPod? Riiiiight.
My Sandisk Sansa (which I LOVE!) is the same size as a Nano, just a tad thicker. Not by much, though. I was able to alter a belt-clip case made for a Nano to fit my Sansa.
Just took a few snips. And...I can replace the battery myself. Whee!Yes, I've heard arguments that Microsoft is the devil incarnate as a company, blah blah blah. But, it's very very hard to hate Bill Gates himself, considering all the good he is doing with his foundation. I have classmates who are going to Cambridge University on Bill Gates' money. His money is going to fund possibly my (and other fellow scientists') research on stem cells. Can't knock a guy for that.
X-Punisher
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who honestly needs a thing like that? NEEDS?! I don't even have an iPod.
spideyboy_1111
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most people i know who have had an ipod end up having problems with them eventually...
Gamma Ray
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http://www.gearlive.com/index.php/n...ge-zune-exclusive-microsoft-zune-demo-105108/
Video of the Zune in action. I want this merely for the fact that I can watch recorded TV from MC on it.
Video of the Zune in action. I want this merely for the fact that I can watch recorded TV from MC on it.
imdaly
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Didn't think about this until now, and was probably obvious to everyone but me, but does this mean that soon I'll be able to jump on the Zune music marketplace from my XBOX360 and use my MS Points to buy songs to put on my harddrive?
That'd actually be pretty cool.
That'd actually be pretty cool.
Jason Blood
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I'm buying a Zune because I refuse to buy apple
simple as that
simple as that
Gamma Ray
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http://on10.net/Blogs/duncan/zune-walkthrough/
Video of the Zune, its features and more information.
Video of the Zune, its features and more information.
Gamma Ray
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