Mike McGuire

Apple gets some props this week for allowing consumers to upgrade their existing iTunes-purchased library of songs to DRM-free AAC/256kbps versions one at a time. As opposed to having to upgrade the whole lot as originally required when the store’s catalog was converted to DRM-free status earlier this month. (Yes, I thought $700 was a bit much to have to cough up all at once. Especially since among my purchases were a few that, upon reflection, were clearly mistakes. Then again, I can also understand why Apple would want to at least try the all-in-all-at-once upgrade: Hey, you never know if you don’t at least ask…)

On the other end of the online music spectrum, there is Microsoft’s Zune. Today, my colleague Van Baker and I spoke today with Adam Sohn, head of marketing for Microsoft’s Zune efforts.  Despite reports that the Zune effort managed to lose $100 million (a 54% drop compared to the year-ago quarter) in the same quarter Apple’s iPod managed three percent growth in sales, year-on-year. Clearly, a down economy impacts different companies in different ways.

Sohn was adamant that the Zune lives.  The December quarter’s results for Zune were the result of a flattening in demand for the category (here again, Apple’s results would seem to maybe undercut that a bit) and the economy. Sohn said the company will continue to invest in Zune and noted that among future steps will be integrating Zune software into WindowsMobile-based devices. This is a step we’d suggest they pursue, oh, I don’t know, about three years ago.

Hard to count Microsoft and Zune out, but with the online music market changing so dramatically, without a major, major departure in strategy – for both the service and the hardware – I have to wonder if they’re condemned to fall further and further behind.

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