As Microsoft officially kills off Zune, Mark Oakley asks why so many digital music services are failing where Apple and Spotify continue to succeed
You may not have been aware that it was still going, but Microsoft has officially, finally, laid Zune to rest. Yes, the much-maligned music service is ending for good, with official word from Camp Redmond confirming that services will be stopped come November 15th. The fact that this will come as a surprise to many of you – surprising in that you probably thought Zune had already long ceased to be – is testament to just how poorly Microsoft has fared in the digital music service arena for years.
Zune, and I’m being charitable here, was a total failure. After its Zune-branded music players were completely bullied out of the market by the competition, Microsoft’s Zune Music service was rebranded as Xbox Music back in 2012, before then being again rebranded Groove this year. The Zune services have, oddly, continued to co-exist until now, but none of them ever captured the public’s imagination in the same way some of its rivals managed.
Zune’s not alone in its failure, though. There are many digital music services that have been and gone, but where did they go wrong where Apple, Amazon and Spotify have gone right?
Nokia Comes With Music… And DRM
Ah, Nokia. Remember Nokia? The mobile phone brand was once a genuine competitor in the marketplace alongside the likes of HTC and Samsung and, in 2008, it made a play for the digital music market with the launch of Nokia Comes With Music.
The initiative was both intriguing and highly enticing. Buy one of a selection of Nokia mobile handsets and get unlimited music downloads for a whole year; any tracks downloaded were then yours to keep forever. This was clearly a direct attack on the likes of Spotify, with Nokia’s all-you-can-listen-to policy attempting to cater for eager audiophiles. Why, then, did the service close just three years after it was launched?
Well, Nokia’s initiative was highly prohibitive, with users having to listen to the downloaded music on their Nokia devices or on their PC. One PC, at that. Yes, the service required the user to register a single PC, so the system was doubly limited.
Amazon realised that selling DRM-free MP3 tracks was always going to be a far more palatable proposition for consumers, and even Apple hopped on the DRM-free train in 2009. Nokia’s hopes were probably based around the premise that consumers would look past the restrictions as they were being handed access to a catalogue of millions of tracks for free. Unfiortunately for it, they didn’t.
According to media reports circulating a year after its launch, UK subscribers were in the low tens of thousands, which wasn’t going to be enough to sustain a charge on the industry. It did have a little more success in other countries around the globe but, at the time, a Nokia Music spokesperson said that one of the core issues surrounding the service’s failure to launch was that the two (yes just two) devices supporting Nokia Comes With Music were a little out of date themselves.
With Nokia’s music service never managing to get off the ground, a few years later Nokia itself would be sold to Microsoft and the brand name would be little more than a footnote in history for western consumers.
How Tidal Got Swept Away
“I’m not a businessman. I’m a business. Man” are the words of Shawn Corey Carter, specifically pat of his lyrical contribution to the Kanye West track Diamonds From Sierra Leone. Said Mr. Carter is otherwise known as Jay-Z, one of the most influential men in music. The man’s not lying, either. With an estimated net worth of over $500m, according to Forbes, Jay-Z is indeed a business in his own right.
He is also quite the businessman, despite his assertion to the contrary. He has worked as an executive producer on video games and has in the past been a part-owner of a basketball team. He’s also a major shareholder in Tidal, the music streaming service that he helped to relaunch following his acquisition of the company behind the service, Aspiro. When Tidal was revamped under Jay-Z, it didn’t exactly have a soft, quiet launch party.
In March of this year, the press conference to officially relaunch the service brought 16 music artists on stage, including Alicia Keys who spoke a lot about how Tidal was going to change things in the industry. Here’s the quote: “So we come together before you on this day, March 30th, 2015, with one voice in unity in the hopes that today will be another one of those moments in time, a moment that will forever change the course of music history.”
Yet, despite all the grandiose statements of the press launch, many were left wondering what exactly Tidal was all about. Jay-Z and his crew of artists were keen to point out that Tidal was about supporting the artist and making consumers understand the importance of paying for their music. While most good, honest people weren’t going to argue against the notion of a fair days pay for a fair day’s work, the argument gave them little reason to sign up. Simply put: what’s in it for us, Jay?
This, bluntly, has been Tidal’s problem. It’s all well and good providing a service that benefits the artist. PledgeMusic and Kickstarter have proven how effective fan engagement can be with entire projects funded via these sites. The key with those crowdfunding services, however, is that consumers are typically rewarded in some way – an early release, a credit on an album sleeve, a mention in a song.
Tidal, on the other hand, has little to entice consumers, not least because of the lack of any free tier payment plan for consumers to sign up for and see what all the fuss is about. It does offer a higher-priced service for better quality audio, but consumers can make that choice for themselves by purchasing CDs or vinyl. In refusing to offer a free option, Tidal has found itself behind the 8-ball when competing with well-established, popular streaming platforms like Spotify and Pandora. Ad-supported free streaming offers consumers the chance to discover new artists, artists they can then potentially support financially by attending their concerts and buying their back catalogues. Tidal’s approach doesn’t allow for that.
Unfortunately for Jay-Z, the initial launch was misjudged (certainly to a UK audience), the pricing strategy all wrong (the premium £20 a month charge for higher quality audio has limited appeal among a limited audience group) and it’s up against established competition. Tidal isn’t making waves. It’s just crashing on the rocks.
Where Microsoft Got It Wrong
Microsoft has rebranded its digital music service twice since laying Zune hardware to rest. Xbox Music then became Groove earlier this year but the problems regarding consumer take-up of the service remain the same.
Microsoft, perhaps unwisely, stopped free streaming on its platform in 2014, focusing instead on making “Xbox Music to deliver the ultimate music purchase and subscription service experience for our customers”. By monetising the service and forcing consumers to subscribe if they wanted to continue, Microsoft backed itself into a corner and put itself up directly against established, free competition.
While it made sense for Windows Phone users to climb aboard, there was little incentive for anyone else to bother. Have you ever seen audio partners mentioning Xbox Music or Groove on their packaging? Where Apple has AirPlay speakers to support it – if you happen to have lots of money at your disposal – and Spotify had the Sonos music system as a backer, who was backing Microsoft?
And now there’s Groove. The rebrand was obvious enough – Xbox Music implied that it was an Xbox-linked service alone – but what is it actually offering over the competition? Very little, truth be told. Again, beyond Microsoft Phone users there is little here to encourage people to jump on board. A shame for such a major company.
Competitive Advantage
In any industry the concept of gaining a competitive advantage over your rivals is crucial if you’re going to make your mark. In the case of digital music services, there are a few key factors that have helped iTunes, Spotify, Amazon and Google Play move ahead of the rest. This isn’t to say that they are better than other services out there, but they have become the most popular for a few primary reasons.
Perhaps the most important reason falls down to music licensing. Spotify has become the key player in music streaming because of its deals with all of the major music labels. This results in over 30 million songs being available to its users, a figure that’s difficult for other streaming services to keep up with. There are other, higher-quality services in competition, but Spotify’s catalogue is a winning factor in its success story. That breadth of choice also underpins the loyalty that consumers show to iTunes and Amazon – don’t just cover the major artists; show some love for the little guy.
Their success has also been based on regular re-assessment of their UIs, providing enhanced social interaction and a commitment to ease of use that consumers have responded to. Furthermore, in the case of Amazon, iTunes and Google Play, all provide free music or cut-price “deals” that have helped to boost sales and keep consumers interested. For Spotify, despite some missteps along the way, its tiered pricing system has hit a sweet spot between lowerquality, ad-supported listening and higher-quality audio streaming for a price. Mobile interaction has also proven a winner for the industry leaders. Well-written apps are crucial in this respect.
Finally, and perhaps most crucially, the guys leading the field are established market players. Having built up an audience, they have managed to successfully stay ahead of rivals by simply being the biggest fish in the fishbowl; iTunes, Amazon and Spotify managed that by diving in early and keeping their wits about them, as is often the way of things. The fittest will thrive, as it was in the retail space where the likes of HMV, Our Price and Virgin eventually grew to dominate independent music retailers. Digital downloads, and then streaming, changed the music retail landscape, of course, and the most successful digital music services seized the opportunity to provide ecosystems with their own hardware or via savvy partnerrships.