David Haskin

Microsoft uses Zune to stab friends in the back

By David Haskin
January 08, 2007 11:27 AM EST

It's obvious even with CES just getting started out here in Las Vegas that Microsoft is pushing Zune hard. I plan to get to Microsoft's booth a bit later, but one thing is already clear: As many suspected, the release of Zune means Microsoft is turning its back on its PlaysForSure digital rights management software and all those who use music services that use that scheme.

I say this for two reasons. First, last night I asked an executive at one of those music subscription services point blank whether his company, which uses PlaysForSure, was being shafted by Microsoft and his answer was a blunt yes. Others involved in the industry who I've spoken with agreed.

That doesn't mean that the subscription services such as Napster and Rhapsody will fade away. Other DRM schemes exist and RealNetworks, which runs the Rhapsody music service, is working on its own DRM scheme that it hopes to sell to such vendors. But it does mean that Microsoft first lured these services in with PlaysForSure as a way to compete against Apple and iTunes, then hung them out to dry when they didn't grow as quickly as Microsoft expected. Industry insiders here say that Microsoft is finished improving PlaysForSure and, instead, is concentrating on its own Zune hardware, service and digital rights management software.

Need more proof? I subscribe to Rhapsody software, which I stopped using temprorarily when I reviewed Zune. When I was finished with the review, I shipped the Zune back to Microsoft but forgot about the Zune software on my system. I went back to using Rhapsody but ... Rhapsody didn't work. I couldn't transfer music downloaded to Rhapsody to my media player. It did start working, however, when I uninstalled Zune.

Did Microsoft disable it's one-time ally, Rhapsody, on purpose or was it a coincidence? We'll never know, but one thing is clear: Rhapsody, Napster, Yahoo! Music Service, the imploding Virgin Digital and others that bought into Microsoft's one-time dream of beating Apple will have to figure out what to do now that Microsoft has decided to compete against them and not support them.

PlaysForSure isn't dead, but it is becoming very apparent at CES that it will die a lingering death. For Microsoft's part, it is either unrealistically confident that Zune will be a big success over the years despite a sporadic – at best – start or it is burning bridges that it really shouldn't be burning.