Microsoft Eyes Hollywood Deals to Trump iPod
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Microsoft's Zune is looking to Hollywood to gain an edge on Apple's iPod.
Microsoft executives have been making the rounds at talent agencies and production companies in recent months in hopes of licensing exclusive original video programming for the portable media player, which has struggled to gain traction in the marketplace.
While Microsoft has denied persistent rumors that Zune would expand into communications a la Apple's iPhone, the company confirmed being in an "exploratory phase" regarding supplementing the TV content it already licenses from studios with Zune-only fare.
"What we would be looking to do with any form of original content is the added component that Zune could provide that iTunes or any competing service couldn't," Winn said.
Exclusivity could mean either locking up content that only appears on the Zune platform or syndicating content that appears first on Zune before moving elsewhere with Zune branding.
Finding some point of distinction is becoming paramount for Zune as it strives to come anywhere close to the market share that iPod has amassed among portable media players. In May, Microsoft said that just 2 million Zunes had been sold since the product's launch in November 2006, whereas Apple reportedly averages 3.5 million iPod sales per month.
But the iPod has no exclusive content. Becoming the only hand-held device to boast exclusive programming could represent either a bold reinvention of Zune or a last-ditch effort to stave off extinction.
Microsoft has been dogged by rumors that Zune will be scrapped. Robbie Bach, president of entertainment and devices division at Microsoft, raised eyebrows last month among Microsoft watchers by barely mentioning Zune in a session with analysts.
But Winn said Zune is in no such danger. Rather, the product plays a key role in Microsoft's buildout of an interconnected ecosystem where content seamlessly flows among all company-owned platforms like Xbox.
It's that gaming console that inspired Microsoft to think differently about Zune, Winn said. He cites "Halo," the popular video game franchise that helped establish Xbox as a tool for remote multiplayer action as opposed to single-player mode. Similarly, Winn sees Zune as poised to redefine video consumption -- from the traditional solitary pursuit to the backbone for a more communal experience.
Key to that strategy is Zune Social, which connects Zune users through social networking software that, among other capabilities, lets fellow subscribers know the last song consumed. By Winn's thinking, the characters in an original program conceivably could have playlists of their own that could automatically load into users' devices -- deepening connections between users and content.
"The thing we've all been looking for is, 'What can we do that is a little more interesting than just looking at a piece of video?' " Winn said.
It's a far cry from when Zune launched nearly two years ago as a music player. But Microsoft has broadened its utility just as iPod has, introducing a video marketplace in May with a few select content partners including NBC Universal and MTV Networks. Gaming also is slowly being added.
Now Zune is looking to not only add programming that iTunes doesn't deliver but also take the same programming it does and supplement it with Zune Social. Microsoft already has begun experimenting with adding extra features to video game "Ninja Gaiden II" and NBC series "Heroes."