Zune Pass v. iTunes: Which Is a Better Value?

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“What do you mean, it'll cost me almost $30,000 to fill my iPod?!?”

That’s the reaction Microsoft (Stock Quote: MSFT) appears to be expecting with its new Zune ad campaign.

The online-only campaign, which launched mid-May, targets the price comparison between filling Apple’s 120 GB iPod (which will supposedly run you $30,000) and filling Microsoft’s Zune mp3 player (with a $15 monthly Zune Pass subscription service).

The commercial spot (which you can watch online) features Wes Moss, a certified financial planner and host of the popular Money Matters radio talk show, talking about music downloads from a purely financial perspective. The pitch is that if you fill your iPod with songs legally purchased through the iTunes music store (Stock Quote: AAPL), you’ll be shelling out around 99 cents for each 4 megabyte song, eventually totaling $30,000.

Thirty grand? In reality, the majority of iPod users don’t use all the gigabytes they have. What's more, a large part of the population still illegally downloads music and video files from file-sharing networks. The Zune advertisements also don’t take into account free song downloads or songs ripped from CDs you already own.

However, the concept behind these slightly tilted ads does raise an interesting point. By paying $15 per month for the Zune subscription, you get unlimited access to Zune's entire music catalog. The Zune Marketplace allows users to choose from more than 4.2 million songs (85% of which are DRM free) compared to iTunes' 10 million songs (all of which were recently made DRM free).

Zune Pass songs work differently than iTunes songs. With a la carte iTunes purchases, you download and keep the songs for all time. But Zune downloads are only playable on your computer and Zune device. (So you can't, for example, burn them on to CDs. And once you give up the subscription, the songs go away.) The Zune subscription does, however, allow you to keep up to 10 songs a month. And you can also buy Microsoft Points, which allow you to purchase songs one at a time from Zune without a subscription. Those songs don't expire.

Bloggers and critics on the web will point out that this makes the ad campaign misleading and not the extreme value the ads suggest.

However, before passing judgment, Brian Seitz, group marketing director at Zune, explains how the average consumers actually use these songs. How many CDs or song files have you purchased in the past that sit there collecting dust after only a few plays?

“People across America are looking at expenses, trying to cut back," says Seitz. "The Zune lets you keep that rich entertainment experience of listening to and finding new music without having to do it on a per transaction basis.”

Seitz also admits that the goal of the new Zune spots are not to dethrone the iPod/iTunes kingship. More realistically, he says they are merely trying to offer the consumer an alternative to the pricing whims of iTunes.

 

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