Late last week Microsoft tipped its hat and let the media know that they, too, want to join the uncontrollable orgy of losing money in the on-line music biz. Details are still slim, but the store is scheduled to open in the second half of this year, and undoubtedly will feature Microsoft’s secure music format, WMA. What’s interesting about this story isn’t the addition of yet another player to an already crowded field dominated by Apple. Rather the really interesting part is this: what do Microsoft’s partners all think of this?
It’s not hard to see why the scenario could be upsetting. Pretty much every on-line music store, save the iTunes Music Store, licenses Microsoft’s DRM technology for their songs. Some would argue that Microsoft’s entry into sales itself represents a conflict of interest. They obviously don’t need to license their own tech, so Microsoft may be in a position to cut prices and undermine those using Microsoft’s DRM. Then there’s the war chest. Microsoft can outlast them all when it comes to surviving rough times. Then again, Microsoft having its own service isn’t necessarily a guaranteed formula for success. The company needs to have greater success than its rivals (save Apple) at getting standard, somewhat respectable DRM provisions. You might assume that the king of DOJ dodges could accomplish this, but wouldn’t they have gone to bat for the licensees already? Mmm, maybe not.