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Microsoft Launches Xbox Music

In the run-up to the launch of Windows 8 operating system on
Oct. 26, Microsoft is doubling down on the music space with the launch of the
new Xbox Music service that will offer users free streaming services,
subscription music offerings and download-to-own services.

As part of the launch, Microsoft will be offering some 30
million songs globally, including some 70,000 music videos, of which 18 million
will be available in the U.S.

The launch of the services is timed to the upcoming release
of Windows 8 and new Microsoft mobile devices later this month and is part of
the company's push to offer a much improved entertainment experience for these

Although Microsoft's Zune music service failed to become a
serious competitor to iTunes in the digital music space, the company's renewed
push into music highlights the importance of its overall entertainment efforts.
"You can't be an entertainment company without music," noted Jerry Johnson,
general manager of Xbox Music in an interview.

The Xbox Music service also highlights Microsoft's ongoing
shift in the positioning Xbox as an entertainment offering -- with extensive
movies, TV and music content -- rather than simply a gaming console. Those
efforts have made Microsoft an important partner for TV and movie companies
during the last two years.

The new music service does, however, represent a significant
shift from its earlier efforts. "Zune was all about the device," Johnson
explained. "This is more about a service that connects all the devices

Johnson noted that there are a number of well-established
players in the digital music space for streaming, Internet radio and downloads.
But consumers face some difficult challenges moving from one type of services
to another or in accessing their favorite content on multiple devices.

"We see a very big opportunity in taking those disparate
experiences and bringing them together into one experience," he noted.

As a result, the new Xbox Music offering will allow
consumers to access music on multiple devices and will include three types of
services: free streaming on all Windows 8 and Windows RT tablets and PCs; the
subscription Xbox Music Pass that will cost $9.99 in the U.S.; and the Xbox
Music store.

The offering also includes cloud-based services that will
allow users to access playlists and their favorite content on multiple devices.

The free streaming services launches on Oct. 26 in 15
markets worldwide. The Xbox Music Pass will begin rolling out on Oct. 16 on
Xbox consoles in 22 markets and will be on Windows 8, Windows RT and Windows
Phone 8 in 22 markets.

The Xbox Music Store will also be available on Windows 8,
Windows RT and Windows Phone 8 in 22 markets as those devices become available.

While Windows 8 is designed to offer improved entertainment
experiences, Microsoft is also planning to make the Music services available to
other devices. Sometime in 2013 Apple iOS and Android devices should also have
access to Xbox Music.