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Posted on 11/13/2006 5:52:42 PM PST by Swordmaker
Microsoft's Zune Marketplace will sell individual songs for Windows PCs and Zune digital media players "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," Candace Lombardi reported in late September for CNET News.
Lombardi reported, "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."
MacDailyNews Take: Several MacDailyNews readers have suggested that we do the math, so here's the deal:
• 79 Microsoft Points equals 99-cents or one song.
• The smallest amount of Microsoft Points available for purchase is $5.00 or 400 points.
• Each Microsoft Point is worth 1.25-cents.
• So, you give Microsoft your $5 and buy your 5 songs. That's 395 total points. Microsoft has your 5 points or 6.25-cents "left over."
• Say you want an album's worth, or 10 songs? You give Microsoft $10 for 800 points and buy 10 songs for 790 points. Microsoft has your 10 points or 12.5-cents "left over."
• See where we're headed? Microsoft is taking money from their pigeons, er... "customers" and placing it in an interest-bearing account to earn themselves more money on their generous customers' interest-free "loans."
• Now, if you don't wish to give Microsoft your money to use for free to generate interest income for Microsoft, you need to figure out exactly how many 79-point songs to buy, so that no points are left over. The smallest number that might work is 15,800 points for 200 songs at 79 points each. Let's see, you'd need to buy:
- three (3) $50 sets of points for 12,000
- one (1) $25 set of points for 2,000
- one (1) $15 set of points for 1,200
- one (1) $5 set of point for 400
- Total = $195 for 15,600 points. Wait, that doesn't work, we still have 200 points left over. Let's buy 2 more songs for 158 points. Uh oh, 42 points or 52.5-cents "left over."
• This is harder than we thought.
• Calling all mathematicians! Can you buy Microsoft Points (available in denominations of $5 for 400 points, $15 for 1,200, $25 for 2,000 and $50 for 4,000) in such a way as to buy your songs without leaving any free "left overs" for Microsoft to use to generate interest income? If so, what's the formula?
[UPDATE: 11/12, 3:57pm EST: Thanks to Matt from Spain and his helpers below, the magic formula to avoid giving Microsoft a free loan is 79 points x 400 (smallest denomination available for purchase) = 31,600 points or 400 songs at 79 points each. Total cost: $395. Not very practical, is it?]
So, the real point is clear: Microsoft's "points" are designed to confuse consumers and generate interest income from "left over" amounts. Now you know why "1 Microsoft Point" doesn't equal "1 U.S. Cent." Boy, if Microsoft can dupe enough people into this Microsoft Points scheme, those "left overs" will really add up.
To buy even a single 99-cent song from the Zune store, you have to purchase blocks of "points" from Microsoft, in increments of at least $5. You can't just click and have the 99 cents deducted from a credit card, as you can with iTunes. You must first add points to your account, then buy songs with these points. So, even if you are buying only one song, you have to allow Microsoft, one of the world's richest companies, to hold on to at least $4.01 of your money until you buy another. And the point system is deceptive. Songs are priced at 79 points, which some people might think means 79 cents. But 79 points actually cost 99 cents. - Walt Mossberg, The Wall Street Journal, November 09, 2006
In stark contrast to Microsoft, Apple charges real currency. You buy a song from the U.S. iTunes Store for 99-cents, you pay 99-cents. You can buy one just one song, if you like, and you'll be charged 99-cents. No left overs. No formulas. No "points" scheme. Just a single, simple, straight-up, honest transaction.
Zuning for points... or how you, too, can lend Microsoft money...PING!
But do they take green stamps?
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The Apple iPod series of devices so dominate the market for portable music players that Microsoft may have to spend several hundred million US dollars in order to think about competing against the iPod. The current nanos are excellent devices with very good sound quality and long battery life per charge (up to 24 hours playback time).
al baby ping
did they infringe on your zune?
They bother for two reasons: one, Microsoft cannot stand not being involved in a technology submarket, whatever it is. And two, they apparently believe there are enough iPod haters out there that they can make a consistent profit.
It's telling that even the most positive reviews of the Zune label it as merely "a good start," and usually end by saying "watch out for Zune version 3 or 4!"
This sounds almost as complicated as Amway's PV/BV/Wholesale/Retail marketing plan.
Heh heh heh heh! Only Microsoft could over-engineer a "simple" product like this so spectacularly!
I wonder if there's any relationship between this sort of thing and the accounting rules that apply to gift certificates and gift cards. As I understand it, publicly-traded companies can't treat money spent on a gift card as income until the card is redeemed.
They must really believe it a lot, to sink to the depths they've sunk. This is from the current issue of The Economist (emphasis mine):
In recent years, Microsoft tried to use the same approach with consumer technologies. It developed music and video software and invited gadget-makers to build hardware around it, and other firms to build compatible online stores to sell content. This “flat out didn't work,” says Matt Rosoff of Directions on Microsoft, a specialist research firm. In the case of music, Microsoft's PlaysForSure software proved flaky: not all music from all stores would play for sure on all players, and the iPod remained unchallenged.
So Microsoft has ditched the idea of providing enabling software to other firms in favour of Apple's approach of doing everything itself. Its first move in this direction came with its Xbox games consoles, in which hardware, software and an online service are tightly coupled. (The Xbox division also reports to Mr Bach.) Zune is much more controversial, however, because Microsoft's pre-existing hardware and service partners are left high and dry. “I've never seen a business so blatantly screw its business partners,” says Peter Sealey, a professor at Berkeley's Haas School of Business.
they can try but hope the packed a lunch
Probably... money paid for gift cards or held on account must be returned to the customer or, if not possible, eventually escheat to the state.
Actually that is not a drawback for the company... They get to invest them money and earn interest on it while they hold it... if their original agreement with the customer does not allow for payment of interest, they only need to give the original amount to the state and can keep the interest.
Wow. That's ... horrific.
Steve Jobs must be laughing his butt off tonight. "Welcome to the social"? Are they kidding?
Perhaps it's a "Social" disease...
Steve Jobs said weeks ago that he wasn't worried about the Zune. Now I'm thinking that wasn't just a case of him putting on a brave public face.
Meanwhile, I dropped my iPod Nano in the parking lot earlier tonight... couple of small dings and dents along the top edge. And of course I wasn't using that plastic shell case I bought for it... sigh.
OH boy... Is that the best FUD you can come up with? Make a better product.
What is incorrect in the article, Echo?
Its Lame FUD oh NO a couple cents.
Its for Zune and Xbox LIVE.
Get Points!
Microsoft® Points is a universal system that works across multiple products, including Xbox Live® Marketplace. Now you can truly explore new music on your own terms. Want to learn more about them? Here’s how they work:
Getting Started
The Points that you purchase can be easily managed in a special account that you can use on Zune Marketplace and Xbox Live Marketplace. You can buy Points online from the Marketplace itself by using your credit card, or you can pick up Microsoft Points cards at many participating retail locations and use those Points to purchase new music that you want.
Once you purchase Points, you can browse and purchase songs or albums through the Zune Marketplace for 79 Microsoft Points per track. When you purchase a track or album, you own it outright. That’s right. You can sync it to your Zune, rip it to a CD, or even send it to a friend’s Zune so they can see if they like it.[1]
'All You Can Eat' Music Buffet
Sometimes you don’t feel like buying an entire album. You just want a few tracks. With Microsoft Points, you can purchase your favorite songs individually and create your own playlist with as many artists and tracks as you wish. The Points that you purchase can be easily managed in a special account that you can use on Zune Marketplace and Xbox Live Marketplace.
But, if you want to explore what’s out there and try songs before purchasing them, the Zune Pass offers you access to millions of tracks for $14.99 per month. The Zune Pass provides a Zune user with a music catalogue that not only offers access to more than 2 million tracks, from a wide-range of artists at launch, but is dynamic and will continue to grow and evolve over time.
Using the Points
When you use Microsoft Points, you can share your Points balance across Zune and Xbox Live purchases, if you set up your account using one Windows Live ID account.
Get on Zune Marketplace, explore new music, connect with friends and spread the music!
Its better than the Ipod and iTunes.
See the link in #14.
Genius! Sheer genius!
Time to buy more MSFT!
Zune.net isn't open all the way yet obviously some kinks will be found and fixed with the site and with the software.
Engadget didn't interact with Zune.net, and their problems aren't merely "some kinks."
That's some RDF you've got going there, ET.
Why did they have problems and others didn't have any?
They weren't the only ones to have problems.
As for why they had problems... it's first-release Microsoft software.
I asked the clerks how many Zune's they had sold... the check out clerk said "What's a Zune?" and the store manager, walking by, said "So far we haven't sold even one!"
Meanwhile, a couple of store employees were putting up hanging banners in the middle of the store that said "MP3 City" and "iPod Headquarters!"
Let's see... MS sells 1,000,000 songs (Don't laugh, they might reach that number in the next year or so)... what's a couple of cents among friends, right? Try $20,000 ... that Microsoft hasn't earned and has no plans to refund.
Think of it as a 2% gift ... the math actuall shows its about 1.26%... to one of the largest corporations in the world.
I believe it. Even the people anticipating the Zune simply because they hate Apple and/or the iPod aren't buying the thing. Their numbers aren't large enough to create significant demand, and it's not like there's a groundswell of iPod users angry with what the product has become.
Microsoft is doing what Microsoft always does; entering a market because they're afraid of not being involved.
"At the signpost up ahead...
"MS locked this door with the key of no imagination. Beyond it is another dimension - a dimension of sound, a dimension of limited sight, a dimension of points. You're moving into a land of both shadow and little substance, of brown things and borrowed ideas. You've just crossed over into the Twilight Zune. "
Its apples fault for the .99cent song stuff.. xbox live already had the points system setup.
Larger screen, can share songs via wireless, its lighter(weight), faster song browsing(better hardware), can subscribe to download as many songs you want with subscription service(yes its controlled with DRM but Apple doesn't offer anything like it)... And you can still BUY the songs for $.99
Larger screen... same rez... equals larger pixels... equals blurrier appearance.
Can share songs for three plays and then you have to buy it on your computer.
Lighter???? 30GB Zune 5.6 Ounces... 30GB iPod 4.8 Ounces ... is that extra 8/10ths of an ounce made of anti-matter???
And the point of this whole article is that until you've bought 79 songs, each song costs you at minimum $1... and you can't buy just 79 songs without leaving Microsoft holding some of your money.
Also Zune has an FM tuner.
Your source is an idiot who cannot even do basic internet research, Echo.
Note the weight that Microsoft says the Zune weighs. You can click the pictures to visit the source websites.
Now note the weight that Apple says the 30GB iPod weights.
Note also, that according to Manufacturer's specifications, the iPod will play for up to 20 hours and your vaunted Zune will play only up to 14 hours... gee, that's too bad.
It was I. My point that I made to you then remains the same... on Workstation class machines in an enterprise, only a fool would trust using an overclocked processor on mission critical work.
You wanna play games with your hot-rod, you go right ahead. You want to meet a contract that requires you to perform, you place your company's assets at risk using equipment stressed beyond the supplier's (not an idiot box assembler's) specifications.
OH! You found the extra 8/10ths of an ounce that weighs down the Zune...
Thats probably liberal math... :\ LOL
well, just letting you know, I was curious so i went on Gateway's site and went to their (live chat, customer support) and talked to a sales rep about the cooling situation.
Microsoft? Greedy? Deceptive?
Say it ain't so!
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