updated 05:50 pm EDT, Thu May 27, 2010
MS thinks Zune Pass could go below 15 dollars
Microsoft on Thursday said it might cut the price of its Zune Pass subscription service. Senior product lead Terry Farrell wouldn't say how certain this was or how much it might drop, but recognized that the Zune's $15 monthly, unlimited downloads weren't necessarily competing well. Music is a "challenging business," he told BusinessWeek in a chat.
The Zune Pass has been a central selling point for Microsoft and is used to significant advantage on the Zune HD. Besides making it easier to fill a player to capacity for a much lower cost than buying per track, it also provides direct-from-Zune streaming while on Wi-Fi as well as a Smart DJ feature that can auto-create a playlist even when some of the music isn't already loaded.
In remaining at $15, however, the Zune Pass has become one of the most expensive services of its kind. Rhapsody dropped its rate to $10, and services like Slacker are adding on-demand song queuing that doesn't permanently store songs but does allow full control of tracks.
Market leader Apple has never opted for subscription music, instead maintaining that users should own their music rather than rent it. The strategy makes filling an iPhone or iPod more expensive but also ensures that every track will stay if the customer stops buying through iTunes.