Buzz Watch: Microsoft Launches a Full Scale Attack on Apple

Authored by Jay Baage on November 7, 2006 - 8:27am.

On Monday, Microsoft announced that it would rent movies and sell television shows through Internet downloads to its Xbox Live video game service. Moreover, I got a call yesterday from Microsoft confirming my delivery address of the new Zune music player, due to arrive for review later this week. In other words, Microsoft is getting ready to launch a full-scale attack on long-time rival Apple Computer Inc. and other competitors in the digital music and video entertainment space.

On November 22, owners of the current-generation Xbox 360 console, with hard drive, can start to use the new video service Xbox Live Marketplace. It is really cool for a number of reasons. One is that it gives new meaning to the buzzword “convergence”. I can already see a digital equivalent of a box set with the new James Bond movie, video game and soundtrack in one. However, according to the announcement, Microsoft will start with offer standard and high-definition films such as Superman Returns and Jackass: The Movie. Television shows will include South Park and CSI: NY.

In total, Microsoft has negotiated the rights to rent or sell more than 1,000 hours of material from CBS, MTV Networks, Paramount, Warner Bros. and Turner Broadcasting, as well as with the martial arts show Ultimate Fighting Championship.

The Microsoft service is a response to market leader Apple’s iTunes store, as well as other up-and-coming services such as Amazon Unbox. There are some differences though. While XBox Live users will be able to keep television shows, movies can only be rented for a 24-hour period. The videos will not be playable on other devices and cannot be burned onto DVDs. However the online service will keep track of purchases so users can log in to watch their videos on a friend’s Xbox.

According to The New York Times (NYT), Peter Moore, Microsoft’s Corporate Vice President for Interactive Entertainment, said that the cost of standard-definition videos would be comparable to what competitors charged. Apple’s iTunes charges $1.99 for an episode of a television show. “The interesting thing is that we’re delivering the 18-to-34-year-olds who aren’t watching TV,” Mr. Moore said to NYT.

Moreover, Microsoft is getting ready to start shipping its new iPod competitor, Zune. While the iPod is by far the market leader in portable media players, almost two-thirds of iPod owners who are planning to purchase a new MP3 player will actively consider defecting to Microsoft's Zune, market watchers have claimed. According to a recent ABI Research report that VNUnet.com have read, many prospective MP3 player buyers, including owners of iPods, have indicated that they would be likely to choose Microsoft's Zune.

I will post a review as soon as I have a Zune in my hands. Until then, read more about this later today in our coverage of Digital Media Wire’s LA Games Conference. It is going to be a great event with some of the gaming industry’s top executives as well a gaming tournament and lots of interesting discussions!

Joakim Baage

Related Links:
Microsoft Zune to take a bite out of Apple iPod (VNU)
Microsoft Xbox to Join the Battle for Video Downloading (NY Times)
Latest DMW Articles on Zune

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Comments

Full scale attack!? Sure

Submitted by zoon (not verified) on November 7, 2006 - 8:52am.

Full scale attack!? Sure thing. Nice hyped up story about nothing... Microsoft shill.

yeah, really

Submitted by anonymous (not verified) on November 7, 2006 - 6:53pm.

This was a load of garbage. Wish I could have that 30 seconds of my life back. What an uninformed asshat. Please tell me where it says that 2/3 of prospective mp3 player buyers will choose the zune. Seriously, please tell me. M$ fanboi.

Dear Anonymous

Submitted by Jay Baage on November 8, 2006 - 7:50am.

The link to the research is in the article above. Note that the article and research I based parts of it on says that 2/3 of prospective mp3 player buyer will consider Zune. If they will actually buy it is another question. However, it looks like Apple is finally getting some competition. And competition is always good when you have a dominant player. Whatever you think about Microsoft, they seem serious about their efforts in the digital entertainment space.

Attack? Yeah - Attack of the Clones!

Submitted by Lutz (not verified) on November 7, 2006 - 9:45pm.

As with the Windows OS, Microsoft will always be trailing Apple in terms of innovation, be it concerning OS for computers or digital music players. Unlike the Japanese car manufacturers who based their 80's success and subsequent world domination on producing vastly improved and better equiped copies of European and American cars, Microsoft has yet to show that their products are more then hyped up clones... If only Microsoft would focus its vast resources on 'inventing' a truly unique new product, rather than trying to bully its way into someone elses market.