Analysis: Digital Music Downloads at Starbucks from Zune? | Digital Media Wire

Starbucks Chairman Howard Schultz last week gave some insight into the company’s future music strategy at a talk in New York, stating: “Within 12 months, probably, you’re going to be able to walk into a Starbucks and digitally be able to fill up your MP3 player with music”. He also added that “over the next 6 to 18 months you will see us look at it, perhaps test it”. The question is - why would people buy their music at Starbucks in the first place?

It is fairly clear why it makes sense for Starbucks to sell music: diversification of revenue streams; increasing foot traffic and time spent in stores; as well as the opportunity to increase sales per customer. However, Starbucks removed CD-burning machines out of most stores that trialed them last year. It seemed like a natural step to replace those machines with technology for downloading music to MP3 players, since the general trend in the music industry is towards digital delivery - so far so good. But the question remains, why would people buy their music at Starbucks?

One reason might be if Starbucks were to give customers some kind of incentive to do so, perhaps a free song with your latte. So who might provide that free song? Apple seems like a prime candidate due to its existing involvement with Starbucks. However, Apple would not have any motivation to discount its songs, with such a strong market leadership position.

Note that Howard Schultz said “MP3″ player in his informal prediction. Currently iTunes does not sell songs in MP3 format; consequently iPods are rarely referred to as MP3 players. The use of the word “MP3” is most likely carefully chosen language so that Schultz can keep his options open, since there are a number of candidates besides Apple that would be highly interested in a partnership with Starbucks.

The most obvious contender would be, of course, Microsoft’s Zune, which also has another advantage to the current generation of iPods – its Wi-Fi support that in theory, could be used to conveniently transfer songs wirelessly to the player in Starbucks.

However, in Zune’s existing form, the player can only temporarily share songs with its own kind rather than buy or download songs from a central location. But that is likely going to change, and if you read our interview with Zune’s Head of Artists Development, Richard Winn, Zune’s editorial voice would not be a bad fit with Starbucks. However, Zune is locked down with DRM-restrictions and its pricing is ridiculously complicated.

Two other WiFi alternatives for Starbucks, though doubtful, include: SanDisk’s new Sansa Connect player and the little New York-based upstart Music Gremlin. Another alternative is for Starbucks to simply team with an independent MP3 store like eMusic or MTV’s Urge. But remember, no one is really making money from selling music online; the money is in the hardware or related services.

The Take Away: I think there are clear advantages for both sides (Starbucks and an established music retailer) in working together to create attractive offers for customers who want to experience new music with their coffee. However, iTunes is the 800lb Gorilla in the music downloads space and does not need Starbucks. A partnership of this type might seem like a no-brainer at first glance, but if you think about it, it does not make much sense. Instead, if the business development execs at Microsoft Zune simply got their act together and stop messing around with weird pricing, restrictions on sharing on songs that only lasts 3 days and open up to selling songs in MP3 format - they would be an ideal partner for Starbucks. Both parties would potentially have a lot to gain in form of marketing and co-branding.

But the question remains, why would people want to buy music at Starbucks? Unless the pricing just makes it a good deal, I don’t really see a good reason.

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Starbucks to offer tunes — Zune? i-Tunes? - Blogging Stocks

After deep-sixing their CD burning experiment and pushing their own line of CD’s at the register, Starbucks Corp. (NASDAQ:SBUX) is preparing to dip further into the music scene by offering MP3 downloads. Last week Starbucks’ head Howard Schultz said that the company would probably roll out the new program within the next year and a half.

The market has responded with confusion and skepticism. The primary question for most is Apple Inc.’s (NASDAQ:AAPL) involvement. Already the market driver, some wonder what would tempt Apple to share the take with Starbucks. Schultz may have tipped his hand in this respect by referring to MP3s, a universal music format that iTunes does not provide.

Microsoft (NASDAQ:MSFT), on the other hand, might have great interest in such a partnership to push their new Zune player, their attempt to horn in on the Apple personal music and portable video empire. After they failed to break the iPod’s lock on sales during the past Christmas season, MS might be looking for some strong cross-marketing opportunities.

However, Microsoft has baggage as well. They don’t sell MP3 format music either. Also, the children of Zune, like the iPod people, are encumbered by strong Digital Rights Management limitations and convoluted pricing, which might put off customers.
If Starbucks goes to a third vendor, however, such as e-Music, one has to wonder if they would receive quid pro quo on cross-marketing. The money to be made selling songs isn’t going to excite investors, and unless the company finds a way to enter into the hardware business (or, as you could say, go insane), the main benefit of such a program could bring is increased customer loyalty and commensurate sales. I expect them to use the MP3s primarily as incentives for upsells, rewards, and new customer recruitment.

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This four-hour documentary examines the history of the United States Supreme Court, and includes interviews with Sandra Day O’Connor and current Chief Justice John Roberts.

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Next iPod to call on iPhone | Chicago Tribune

If you want to know what the next iPod will look like, go to Apple.com and watch the demo for the coming iPhone.

Since Steve Jobs earlier this month introduced the iPhone, which goes on sale in June from Cingular Wireless, much has been said and written about how revolutionary it will be. That’s all well and good, but one aspect has been overlooked: How will this impact the iPod?

The answer is, quite a bit. Already, Apple executives are calling the iPhone the best iPod the company has built. Do you think all that really cool technology, particularly the touch screen, only will be used on a phone that starts at $500?

Hardly. Put me on the record as saying you’ll see a touch-screen iPod this fall, a few months after the buzz of the iPhone launch settles and a few months before the key holiday sales season kicks in.

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Verizon rejected Apple iPhone deal - USATODAY.com

Verizon Wireless, the No. 2 U.S. cellphone carrier, passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple’s rich financial terms and other demands.

Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, said Jim Gerace, a Verizon Wireless vice president. “We said no. We have nothing bad to say about the Apple iPhone. We just couldn’t reach a deal that was mutually beneficial.”

Verizon’s decision to pull the plug on talks sent Apple into the waiting arms of Cingular, which will be the exclusive U.S. carrier for the iPhone. The multifunction device is expected to ship in June and cost about $500.

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I had a few folks over this weekend to test out the HD downloads from Xbox Marketplace (yeah, I know how to party!) I wanted to see what the experience was like. Overall, I was pleased. The selection was pretty good and it was easy to use my points to buy the file. It took 6+ hours to download, but I started it the night before so it was no big deal. It hung up at 68%, but I just started it again in the morning and it finished in about an hour.

As for the video itself, the encode was very good. During playback, it seemed to drop frames in the beginning. I’m chalking it up to a slow HDD rather than a poor encode. Either it stopped dropping frames part way through or I stopped noticing it. Either way, I doubt most consumers would care. I’m told the HD-DVD drives do not have that issue, but I’ve not been able to try it out yet (hint, hint Scott).

Would I do it again. Yes. there are some drawbacks. The main one is you have to plan in advance, but since they don’t expire for 2 weeks, it’s pretty easy to say I want to watch a movie this weekend and just fire it up during the week. I’ve not cross checked the titles available against Bluray or HD-DVD catalogs, but I bet they have things not available on either format. One last thing…I watched the Decent. That had to be the worst movie of 2006. I previously thought The Day After Tomorrow was the worst movie I have seen. this might just replace that.

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I was playing Gears the other day. One of the guys I play with knows I work at MS. He wanted to know if he could stream a divx file to the 360 directly. I knew you could stream avis, but didn’t think you could do it without having the divx codec installed. So…I did a little digging. It turns out there is a program called Transcode 360 that will let you do just that (as well as lots of other formats). Te only issue I see is that it is for MCE (not a problem for me). In fact, it has very tight integration with MCE. All you have to do is put the crsor over the selected flie, hit info -> More options and transcode. Simple as pie. Very cool.

Get it here

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Ditching DRM

You’ve got to feel a little sorry for the Zune team over at Microsoft. The notion of an “iPod killer” may be as tough to sell as a “Windows killer.” They came late to a music player scene that’s already shaken out the weak competitors. They’re pushing Windows Media formats, but people demand MP3 über alles. With Apple’s iPhone mobile media wunderkind announced just before the expected uptick in Zune sales, the timing couldn’t have been worse. To top it all off, reviews of the Zune have mercilessly flogged the almost-cool features crippled by digital rights management (DRM).

DRM has been grabbing headlines of late, not only because of its hindrance to new products and technology such as the Zune — with its three-day self-destruct for wirelessly transmitted music and the slow smothering of the PlaysForSure program — but for DRM’s increasingly apparent general futility. To wit: like every scheme before it, the AACS DRM built into the new Blu-ray DVD format was cracked a few days ago. This, only a month after its sibling HD-DVD fell to a similar technique that extracts encryption keys from the media. As one headline put it, “Blu-ray joins HD-DVD in pile marked ‘owned.’”

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Digital World Zune Not Quite So Social

I’ve already expressed my ire at Microsoft’s “Welcome to the social” schtick — not so much because of the concept of wirelessly sharing files, but because the whole thing sort of falls apart when you can’t find people to share files with.

It turns out that there’s another reason Zunes are antisocial. Even if you do manage to find another Zune owner, you might not be able to share your music anyway. The music labels determine which files can be shared and which can’t, and it appears that they’re generally not too keen on even the limited sharing the Zune allows. That’s not Microsoft’s fault, but this is: when you actually buy a track from the store, you have no idea if the track is shareable or not. So the only feature that really differentiates the Zune from its nemesis is now annoying to use. Way to go, Microsoft.

It also occurs to me that this whole issue of labels restricting the sharing feature is something Microsoft should have hammered out beforehand, in much the same way that Apple got all the labels to agree to a $0.99/track price. Part of the attraction to iTunes is that simple processes pull more people; it’s actually easier to buy music via iTunes than going to a store, because everything is subject to the same price and conditions. Oh, well. Another hard lesson learned.

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GottaBeMobile.com - I’ve been Zuned - Your Tablet PC and Ultra-Mobile PC news source

My wonderful family blessed me with a black Zune for my birthday last night, and what a great gift it is.

Having been an iPod user for the past three or four years, I was excited, yet nervous about trying out this new device. Much to my surprise, the install process went as smooth as silk with absolutely zero issues. I signed up for the free 14 day Zune Pass last night and have been downloading music and syncing to my Tablet PC throughout the day. One of the things I like most about the Zune is the user interface. It feels more intuitive and easier to operate than the iPod. The bigger screen helps a great deal. Getting to my music and navigating is quicker as well. I’ve got several of our InkShows on the Zune and they play wonderfully without any extra work or configuration on my part.

My only disappointment is in the audio book area. Much to my dismay, I learned that Audible.com does not support the Zune, yet. So, to listen to audio books, I’m going to have to buy them on cd and import them from the cd into the Zune. Microsoft and Audible.com needs to get this fixed. When visiting the Zune Marketplace, I should be able to buy books there just like I can on iTunes.

Much has been said about the handicapped wireless and it is true. Not being able to surf the Zune Marketplace and buy stuff using the Zune itself is a definite handicap. However, I would expect Microsoft to address this with a firmware update in future releases.

Until then, I’m going to enjoy the heck out of this new Zune. Thank you Kathi, Dax, Maggie, Anna Kathryn, and Zoe.

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