Last week, Microsoft launched its much hyped iPod competitor, dubbed Zune. The Zune is another mp3 player, with the ability to share songs with other nearby Zunes. Pricing for the Zune itself is straightforward, and basically at parity to the iPod. What’s funny is the song pricing. Rather than just let people buy songs for $0.99 or albums for $9.99 (Apple is actually looking to be more consumer friendly, mulling the idea of giving credit towards complete albums for songs already purchased), Microsoft wants you to purchase points. Each point is worth 1.25 cents, but you can’t buy less than $5 worth of points. Microsoft is trying to As Adrian Kinsley-Hughes points out over at ZDNet, this will encourage people to buy more than one song, juke-box style, and the points can also be used on Microsoft’s XBox Live network. However, Microsoft is using the milking strategy that serves them so well in their core software businesses with the penetration strategy they need to crack a new market. Note that “penetration” does not have to mean “low.” It just means that you don’t put unnecessary barriers between you and the customer.

Microsoft can’t bundle free content with Windows, since that would create antitrust issues. However, the major media companies currently fear Apple’s dominance over their content more than Microsoft’s. The folks from Redmond could have negotiated a deal with the record labels to provide 50 or 100 free songs with every Zune purchase, much like the discount CD clubs. Then they could have just mirrored Apple’s pricing.

Instead, they had to go make it complicated. Perhaps the tech giant can’t help it– see this hilarious take on what would have happened if Microsoft had developed the iPod, a parody produced by Microsoft’s own marketing team.

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