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Blow for credibility of "over-the-air" music downloads, as Microsoft opts for WiFi

by Andrew Orlowski | posted on 22 January 2007

MidemNet, Monday: So Microsoft's strategy for its Zune player is becoming clear. Just dig up what Register readers were talking about five years ago.

Having attempted to add "BluePod" features ("squirting" music between devices wirelessly) to Zune, Microsoft is now promoting another concept that may sound familiar to long-time readers.

On Saturday, Microsoft's media business chief Chris Stephenson said he wanted to see music dispensed by over the air "filling stations" to Zunes.

The British-born executive was addressing the Midem Music expo in Cannes. Stephenson said the best candidates for these digital dispensers - he called them "filling stations" - were retail chains that already play host to WiFi hotspots, and named Starbucks and McDonalds.

The Register first wrote about the idea here. Pioneer Qwikker (formerly WideRay) set out providing infra red data dispensers at conferences at the turn of the decade, and now provides terminals for 700 hotspots, most of which beam over Bluetooth and target phones, rather than PDAs. London Underground plays host to over a dozen such "proximity servers" on the Tube.

Two years ago, Nokia blessed the concept, even ripping off Qwikker's name "Service Point". But Nokia's offering suffered the same fate as so many other good products from the Finnish phone giant, and died a death. Nokia has been talking about the creepy sounding "M2M", or "machine to machine" commerce for much of the noughties, without putting a successful product on the market.

Stephenson said Microsoft was looking for more ways for Zune users to "cache and download on the go".

Despite the mixed reception to Zune, Stephenson said Microsoft was reasonably satisfied with the progress of a product that wasn't even conceived a year ago. He pointed to the retail operation, rolling Zune out to 31,000 stores in the US. Sales-wise, there was less to boast about, but he said the media player had grabbed 21 per cent of the iPod Video category.

Asked about the Universal deal, where Microsoft agreed to pay a fee of $1 to the record label, Stephenson said "we felt it important to make that gesture". He declined to suggest to the audience at the world's biggest music expo that anyone who knocked would get a similar deal.

"There's nothing we're committing to in the long term," he said.

Asked about the choice of brown as one of the three Zune colours, Stephenson said that retailers had been more positive than the critics. Microsoft estimated 15 per cent of stores would want brown Zunes, whereas retailers actually ordered 35 per cent of Zunes in brown. The sell-through was higher than Microsoft expected, but lower than the retailers thought: at 21 per cent.

Repeatedly, Stephenson emphasised that Microsoft had Xbox-scale ambitions for Zune, which means a multi-year, multi-billion dollar commitment.

Microsoft has previously been cagey about the date for a European launch, but Stephenson said Q4 2007 was the target, although which markets would get a local Zune had yet to be decided.

That can build a lot of data dispensers.