Monday, November 13, 2006
Will Zune Flop?
In the end, consumers benefit when there is healthy competition. They benefit both in price and product.
A good argument could be made that content rules our economy. Not software. Not devices. Not the “fed.” Content. Think about it… how successful would the iPod be if it had no songs or movies to sell? How successful would Yahoo! be if they didn’t have articles, weather, email, and everything-else-content imaginable? How many people would tune-in to watch TV if there wasn’t anything good on? Radio? Newspaper? Why do investors subscribe to Bloomberg?
So, wouldn’t it make sense that the company providing the best content is positioned for greater rewards? Not necessarily. Malcolm Gladwell’s “Blink” says that there is such a thing as “Sensation Transference” – which basically means that the package is the product.
This being the case, Zune’s business model is well positioned to have the upper hand. Microsoft is working hard to create win-win arrangements with content providers. Whereas Apple is not. They own the distribution channel, so they have the power to be stubborn and closed. On the other hand, Zuen as a device is nice but not extraordinary – as is the iPod.
So, despite all the bad press and poor reviews, I have high hopes for Zune. I hope they carve out a nice piece of the market – if for nothing else, to nudge Apple a little bit. Thier ads are nice enough. It might happen. The best thing that could happen is that they will get into a feature and price war with one another. In that case, we the consumers win.
How is a Microsoft single-souced player and music store any more or less "win-win" than the iPod and iTMS ?
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