Microsoft's New Xbox Music to Compete With Apple's iTunes

Microsoft on Sunday announced the launch of its new Xbox Music service, replacing the old Zune service, vanquished by iTunes.

Xbox Music will replace Zune Music on the Xbox 360 console Tuesday. On Oct. 26, with the availability release of Windows 8 and Windows RT, Xbox Music will run on PCs, slates and Surface devices. At some point after Oct. 29, with the Windows Phone 8 launch, the service will be available on phones. There will be three levels of service: free-tier streaming access to a 30 million-song catalog (18 million for the U.S.), an Xbox Music Pass subscription for $9.99 a month or $99.99 annually, which removes the ads, and an mp3 download to own store. “Within a year we’ll be launching an iOS and Android client, so it’s not just on Windows phones,” Xbox Music GM Jerry Johnson said. The free-streaming option won't be available on phones, though the Pass will.

Much else is on the way. “Today we’re announcing we’re going into 22 markets,” Johnson said. “That number will continue to grow over this year. It’s hundreds of licensing deals we’re doing globally. We should be the first one to have free streaming of ad-supported content in Canada.”

“The old Zune strategy was to build a device and take that experience over to this client, then over to that client,”  Johnson said. “You couldn’t even create a playlist on the console. It was the wrong approach. The right approach is you create a service, make it extremely rich and then work with clients to share features and create commonalities from the experience of one device to another. We have this great opportunity with the introduction of Windows 8 to deliver this type of simplified, built-from-the-ground-up, all in one experience.”

“Xbox used to mean gaming,” Johnson said. “But 18 months ago, it crossed over this mark where people started spending more time doing nongaming things on a console than they were gaming when they were connected to Xbox Live [online]. Now it represents entertainment across all of Microsoft. Xbox is clearly now being embraced and supported all across Microsoft as the consumer-facing entertainment brand.”

Added Christina Calio, director of Xbox Music industry relations: “People started coming home from work and saying, ‘Honey, what’s on TV? Let’s turn on the Xbox.'"

"There will be an on-demand video store launching,” added Johnson, “and Xbox movies will be part of the offer.”

But Xbox Music is driving the attempt to make consumers think different. “Yeah, we will have a video store," said Johnson, "but music is the one avenue we think we can really differentiate this year against the competition and really solve the consumer’s problem, and introduce something in a powerful way. Music shouldn’t be work. It should be fun.”