A lot's been made of the new Zune commercial that Microsoft aired recently. If you have haven't seen it, take a look. Now don't get me wrong. I think there's a lot that Microsoft can do with Zune, but this ad doesn't quite do it for me. What's wrong? First, it took a shot at Apple that felt silly -- after all, most consumers don't spend $30,000 to fill up their iPod (how much did it cost to fill yours?). Even if that's the case, buying a Zune Pass won't fill up an iPod either. Second, it started to make a value play that's real, but stopped short of actually making it.
The ad was interesting as it begins the discussion of the value of the Zune Pass. That's important. The power of the Zune Pass lies at the core of the differentiation of their whole business model, subscription services vs. single song downloads. Microsoft needs to go further and explain how these two models can co-exist with each other. Up until now there were only two models for music, the free and ad supported stuff on radio, or music you bought or owned (or perhaps acquired elsewhere). Zune Pass and other similar services change all that. While consumers "rent" video content all the time from theaters, cable companies, Netflix etc, there's also a lot of other stuff sold on DVD. There's no reason for this to be binary -- rent or buy -- it's just never been applied to music and when it has, it's not been explained or marketed well at all.