Count on Microsoft to be as clever as the devil. The new Zune business model will turn Apple on its ear. Microsoft will give Universal Music a cut of the sales price of each Zune sold. Apple only gives content providers a piece of the downloaded music or video.One of the reasons that model is attractive to music companies is that much of the content on most iPods comes from ripped CDs. In that case, the music publisher gets nothing. Microsoft has found a way to make sure each music firm is assured revenue from the Zune.The ball now goes to Apple’s court. It does have over 70% of the share in portable multimedia devices, but music companies are somewhat ambivalent about the device. It gives them huge distribution, but Apple keeps most of the revenue pie.Apple will probably see no need to counter Microsoft’s move immediately, but if the music industry warms to it, MSFT may find itself in the role of preferred provider to entertainment companies that think its revenue model is more attractive.And, that could be tough for Apple.
Weekend Edition: Microsoft Zune Finds An Apple iPod Killer
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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