The Two Faced Monster Inside Zune
Yesterday's Strike 3: Why Zune will Bomb this Winter ended with a warning for enthusiasts of Microsoft's Zune:
The Zune isn’t just an iPod rival, it’s part of Microsoft’s efforts to further enslave consumers to a profit engine designed to suit the desires of the music industry, ignore consumers’ fair use rights, and destroy open content.
Over the top? Take a look at the history of Microsoft's efforts in the music industry and judge for yourself.
The Danger of DRM described the world before DRM and the complications that killed a decade of digital products prior to the iPod. It also introduced the new god Microsoft hoped would take over the digital universe: Janus.
The Watchful Eyes of Janus
Microsoft worked with media producers to design a comprehensive technology framework and DRM system named after Janus, the Roman god of beginnings and endings and the namesake of January, who was portrayed with two faces that looked both into the past and into the future.
Like its namesake, Microsoft's Janus planned to keep its eyes on everything, with airtight solutions for the paranoid entertainment industry that would allow them to both sell and rent locked down digital files. Rented files could be set to playback for a certain time period or number of plays and then self-destruct.
Windows Media files could also be set to allow or deny duplication, burning to CD, or copying to a portable player. Portable systems would be forced to register with a central authority, so if the user stopped paying ongoing rental subscription fees, the device would stop playing.
Microsoft planned to license Janus to hardware makers and online stores to create a secure, comprehensive platform for distributing songs and movies. The industry largely assumed that Microsoft's DRM technology would quickly become the de facto standard, and offered little criticism of Microsoft's technology.
Janus of All Trades, Master of None
While the options enforced by Janus offered lots of flexibility to media producers, they created confusion, complexity, and excessively strict and inconsistent limitations for users. A selection of media files might each have different sets of restrictions, depending on the whim or greed of the entity offering it for sale.
Further, the rules governing the transactions between media producers and consumers could change anytime at the whim of producers, leaving buyers with media that suddenly stopped working or behaved differently.
No consideration was made for fair use provisions; consumers got whatever producers decided to offer. Microsoft hoped to choke out all competition, making its Janus-based WMA format the only way to obtain commercial digital music.
The resulting Windows Media experience was nothing like an 80’s mix tape; it had more in common with a PC: complex, confusing, inconsistent, and frustrating.
FairPlay Strikes a Balance
If the iPod hadn't been introduced, Microsoft's Janus would only have to compete against Sony's solo ATRAC effort with its poorly implemented software and online store, Real's similar Helix DRM, and the technology offerings of Open Source projects that offered--by design--no user limitations on mass duplication at all.
To expand upon the success of the iPod, Apple designed a music protection system that struck a balance between the demands of media producers and the desires of consumers for a simple, easy to use system with consistent rules and reasonable prices.
Steve Jobs warned the music industry that any DRM system would eventually be compromised, so rather than attempting to build a highly restrictive system that assumed all consumers were brazen thieves, it would be best to deliver a simple and consistent one that focused on developing a business with honest consumers willing to pay for an experience superior to the online file sharing sites.
The music industry took a lot of convincing. After the initial failure of Microsoft's Janus to materialize, Apple convinced music labels to take a limited risk in selling exclusively to the Mac market.
The iPod’s Optional DRM
The iTunes Store opened in April of 2003, a year and a half after the iPod was first released. It quickly became the first online music store to record significant sales, selling a million songs in its first three days.
While Apple has since old over a billion and a half tracks with its FairPlay DRM, the iPod has no restrictions to prevent the use of open content, and iTunes does not add any DRM to podcasts or Internet radio streams.
Unlike Sony and Microsoft, Apple has never thwarted users ability to play regular MP3 music. Prior to WMP 10, Microsoft applied DRM by default to songs users ripped from their own CDs. Sony only recently decided to allow its users to play back MP3 files on its latest products.
Apple has never applied DRM to user’s own music, and dealing with FairPlay and the iTunes Store is completely optional. There are many iPod users outside of the US who can’t even access Apple’s music store.
Janus Stumbles
Microsoft's confidence in Janus was slightly shaken by rapidly increasing sales of both the iPod and music tracks through the iTunes Store, but the company was sure that as soon as it unleashed its own brand of portable DRM, the music industry would standardize on it and Apple's efforts would be strangled like another Netscape or Java.
Instead, Microsoft's efforts to roll out Janus fell into problems. The technology wasn’t rolled out in January 2003 as promised, but slipped deep into 2004, leaving Apple a year and a half lead.
Microsoft’s pre-Janus Wndows Media DRM had been around since 1999, but consumers hadn’t paid any attention because all it did was restrict media playback to a PC. Consumers didn’t want DRM, they wanted a marketplace for digital music that was fair, functional, useful, and understandable.
In rolling out the new portable DRM technologies in Janus, Microsoft found itself at the mercy of partner stores and manufacturers, each working at cross purposes. Further, the vast majority of customers didn't find music subscriptions very compelling. This was complicated by the confusing variety in players and stores, only some of which supported portable devices and subscriptions plans. 
Rather than offering customers a better experience than mixed tapes in a Walkman, Microsoft's Janusland of players and stores was too complex and too restrictive to hold consumers attention.
At the same time, Apple had extended the iTunes Store to Windows users, and quickly picked up everyone else interested in buying music online. That left Microsoft with a tough remaining market to crack: the users who didn't like Apple and didn't like paying for music.
Microsoft burned through efforts with Napster, Yahoo, WalMart, and MTV but nobody seemed able to sell Janus to customers. Microsoft rebranded Janus as PlaysForSure, but the market didn't respond appreciatively. It wasn't just bad marketing, it was a bad product that consumers were avoiding.
Facelifts for Janus
After two embarrassing holiday season failures in 2004 and 2005, Microsoft determined that if it wanted to establish Janus, it would need to do it itself. The company picked a PlaysForSure player from Toshiba as a starting point, and sought to build on features that could challenge the iPod.
In order to distance itself from the PlaysForSure failure it created, Microsoft decided its own Zune player would use an altered version of Janus that rendered the stores and players of its former partners incompatible and therefore obsolete.
A series of articles have already called into question Microsoft's engineering and marketing efforts with the Zune:
However, the real problem with Zune is that Microsoft has grown so desperate to end its years of failure in online sales of music that it has instigated a plan to revert digital music back to the dark days of DAT and MiniDisc.
Microsoft has voluntarily initiated an RIAA tax on its Zune profits--profits that don't exist and likely won't for some time--in an effort to poison the market for Apple and other manufacturers of digital media devices.
This poses little problem Apple, which has used its market power in the past to prevent the RIAA from arbitrarily raising prices and adding tough new restrictions to digital media. However, it sets a precedent that will be very difficult for independent manufacturers to avoid following.
This All Happened Before
This isn't the first time Microsoft has gambled using future profits it knew it would never make. The company licensed its web browser from SpyGlass in exchange for ongoing royalty payments, but then shipped SpyGlass (aka Internet Explorer) for free as a price dumping attack on Netscape. That allowed Microsoft to destroy existing competition without risking--or developing--anything.
The biggest loser was Microsoft's naive partner, but consumers also ended up with another product category overwhelmingly dominated by Microsoft. Once competition was destroyed, Microsoft's monopoly product fell behind and became another unresponsive, unaccountable mess of viruses, spyware, and security flaws.
Microsoft has an established pattern of dominating product categories, then falling back into a comfortable position of delivering bad, anti-consumer products which slow progress and development.
It's called embrace and extinguish. Microsoft has attempted to put out every market that's ever been considered hot, from cross-platform and open source development to handheld computing and TV media devices.
The company talks about choice, but really works to prevent consumer choice. It is allied with content producers to push products and services that put consumers at a disadvantage, and has worked to kill interoperability and open content.
Microsoft is looking for suckers willing to sign away their rights and undermine the rights of others: to join in, all you have to do is buy a Zune. A poisoned payoff to the RIAA is included in the price.
Microsoft's Passion Power Play
Right now, Microsoft is trying to kill the only thing it's never been able to rub out: Apple's QuickTime, which has been a thorn in Microsoft's side since its arrival fifteen years ago. 
Microsoft sought to kill it as a baby, and has been busy spreading a misinformation campaign against it every since, first by proclaiming that all music on iPods is stolen, then suggesting along with former partner Napster that it costs $10,000 to use an iPod.
This winter, Microsoft has appealed to corrupt authorities in a last ditch effort to kill off Apple's growing following and execute its leading product as an example for anyone contemplating a challenge to Microsoft's position of power and dominance.
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Monday, November 13, 2006
