In addition to lowering prices on its family of flash-based Zune personal media players earlier this week, Zune and its subscriber service, has gone straight past value-proposition marketing to the â€śfreemiumâ€ť handout.
To-date, the Zuneâ€™s music service comprises an onlineÂ service where all the Zune-DRMâ€™d music resides, PC software and proprietary hardware players. Kind of like iTunes mostly, save for the $14.99/month payment model and the wireless-sharing feature that lets Zune Pass subs share songs, playlistsÂ via the hardwareâ€™s built-in WiFi radio.
Now, in an effort to The Zune team announced today that Zune subscribers who pay the $14.99/month fee will get a monthly hit of 10 free, DRM-free songs to download and own. The only catch, and itâ€™s kind of minor, actually, is that you canâ€™t rollover the 10-song credits. Only use three in a month, the other seven donâ€™t rollover.Â Seems simple enough.
â€śBut Mike, â€ś youâ€™re probably saying to yourself, â€śâ€¦this is lowest form of customer acquisition, giving away free stuff in order to get people to sign up for a premium music service.â€ťÂ To which I would reply, â€śYeah, so?â€ť
Business is business and the Zune organization is trying to establish a differentiated subscription service â€“ leveraging Microsoft technology — to compete with Rhapsody and Napster, and the entire a la carte market.Â Subscription services have always wrestled with customer acquisition costs. Weâ€™ve seen Rhapsody and Napster attempt to lower acquisition costs by enabling free (but limited) streaming of their content through Web browsers which didnâ€™t force consumers to download the client software required for conventional subscription offerings. Other tactics those entities have utilized include syndicating their browser-based offerings to other Web-centric music sites such as Yahoo! Music and the music-centric social network iLike.Â
Whatâ€™s that old saying? You have to spend money to make money . . . Has Microsoft spent as much on Zune as Apple has on iTunes and the iPod?