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Tuesday, May 12, 2009, 03:30 pm PT (06:30 pm ET)

Microsoft launches assault on Apple's "iPod tax"

Microsoft is no longer content with turning up the heat against just Apple's Mac lines and has begun a new marketing campaign that attacks the perceived additional costs of filling an iPod with music versus a Zune, but one which omits key flaws in the process.

A new Zune Pass page and matching commercial from the Redmond, Washington-based Zune maker claim that loading a 120GB iPod classic with music solely from the iTunes Store would cost $29,700 where a Zune Pass unlimited subscription service would cost the same $15 per month; the difference is such that it would take 165 years of using the Zune service to match what it would take to load the iPod to the brim.

The campaign also argues that the permanent ownership of tracks is a negative, rebuffing Apple chief Steve Jobs' long-held assertion that people want to own their music instead of renting it. As iTunes shoppers have to commit to any songs they download, they can't backtrack if they decide they don't want the music they just bought. And, since subscriptions by definition encourage exploration of music that would otherwise be too prohibitive, Zune Pass members can download "whole discographies" at will rather than cherry picking individual albums or tracks, Microsoft claims.

Reinforcing the monetary focus, the company has opted out of using the 'real' people found in its Laptop Hunter ads and has instead recruited Capital Investment Advisors expert and frequent media show guest Wes Moss to push its case. He argues that it makes more sense for iTunes customers to consider a subscription service like the Zune Pass depending on the amount of music they consume.

But, similar to the thorough dissection that followed the anti-Mac ads, criticism has already emerged that accuses Microsoft of deliberately padding the actual costs of owning an iPod and using it with the iTunes Store. Variable pricing is one of the most immediate concerns. Microsoft assumes an average cost of 99 cents per song; as many albums cost $10 or less but have more than 10 tracks, the actual cost of buying songs can dip well under that amount. Changes in pricing per song also render it more difficult to calculate a final price in either direction.

As observed by many, the campaign similarly assumes that customers are bent on filling their devices to capacity and are only using sheer quantity rather than quality. It's commonly accepted that most users only buy to provide enough headroom for their own listening demands. Also, those who buy the iPod classic, 120GB Zune or other large-capacity players are more likely to have music encoded at high or even lossless quality, swelling the size of the files themselves and greatly reducing the number of songs that can fit in the available space.

The marketing push likewise sidesteps the limitations of the Zune Pass itself. Although it's now possible to keep 10 download tracks per month, most of the downloaded songs will disappear the moment the subscription ends — leaving owners with just a fraction of what they had listened to before. Any additional songs past the first 10 also cost the same as on most other music stores and can potentially be expensive for those who plan to build large permanent music libraries.

And while all the permanent downloads come as unprotected MP3s, files downloaded as part of the subscription are locked in a Zune-specific format, forcing users to run only the Zune desktop client and use Zune players away from their PCs. The absence of a subscription option in iTunes limits iPod owners' options but also simplifies the process of leaving iTunes.



No matter the merits, Microsoft is known to be prepping more than just promotional spots to put the Zune in a new light. The company has stated it plans to introduce new players this year and may center the spotlight on the rumored Zune HD, its first touchscreen player and a response that may come two years after the iPod touch.