Microsoft Zune subscription deal making play for MP3 customers

BY THE ASSOCIATED PRESS

Published: November 20, 2008

REDMOND, Wash. — Microsoft Corp. is giving an early holiday gift to people who pay for all-you-can-listen access to the Zune digital music store: 10 songs to keep each month, included in the $14.99 monthly subscription fee.

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The decision may appeal to people who have been reluctant to subscribe , preferring to own their music instead of rent it. Microsoft’s Zune Pass, RealNetworks Inc.’s Rhapsody and others give users unlimited access to millions of songs in exchange for a monthly fee. But as soon as the user stops paying, the music stops playing unless he or she forks over extra money to buy each track.

With the new Zune Pass perk, subscribers can use the Zune desktop software as usual to buy individual songs, and the service keeps track of how many free ones remain for the month. In most cases, the song will come in the MP3 format, which can be freely copied to multiple devices and computers.

Microsoft’s Zune is a minor player compared with Apple Inc.’s line of iPods. Apple snagged 71 percent of MP3 player sales from January to September of this year, to Microsoft’s 3 percent, according to market researcher NPD Group.

Microsoft and Apple both sell digital tracks for 99 cents, but so far, Apple has resisted a subscription service while Microsoft has tried to use it to stand out.Microsoft said late Wednesday that it signed deals with Sony BMG Music Entertainment and Universal Music Group so that Zune users can buy MP3-formatted songs, not just ones protected with digital rights management software. EMI Music and Warner Music Group, along with many independent labels, already allowed Microsoft to sell their catalogs as MP3s.

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