Microsoft announces new Zune Pass music subscription model

Consumers can now keep the tracks they love

Zune, Microsoft Corp.’s digital music and entertainment service, today announced landmark agreements with major and independent music labels to bring significant new value to the subscription music model. The Zune Pass subscription service currently gives consumers on-demand access to millions of tracks for $14.99 per month. Starting today subscribers will also get to select 10 tracks per month to keep and add them to their permanent collection (an estimated $10 value).

Agreements have been signed between Microsoft and EMI Music, Sony BMG Music Entertainment, Universal Music Group (UMG) and Warner Music Group, as well as independent distributors INgrooves, Independent Online Distribution Alliance and The Orchard. The Orchard delivers digital music, video and brand services globally, and represents labels including Barsuk Records (Nada Surf) and Fania Records (Hector Lavoe, Celia Cruz). IODA represents labels including Arts & Crafts (Broken Social Scene, The Stills) and Ghostly International (Matthew Dear, School of Seven Bells). The new enhanced subscription model came about as a result of close collaboration with all of these companies.

Zune Pass subscribers will have the added benefit of retaining digital rights management (DRM)-free MP3 tracks from Sony BMG and UMG, in addition to MP3 tracks from EMI Music, Warner Music Group and a large portion of the independent music labels. With the addition of tracks from UMG and Sony BMG, Zune will soon offer over 90 percent of its music in the MP3 format.

“The way people consume music has changed. With the shift to digital from CDs, it is more challenging than ever to offer the right mix of deep content, music discovery and economic value,” said Chris Stephenson, general manager of global marketing for Zune at Microsoft. “People want the freedom to listen to whatever they want across millions of songs, combined with the confidence that they can keep their favorite tracks forever.”

From its inception, Zune has bet on the power of subscription, not only as a consumption model but also as a way to highlight the music discovery features central to the Zune experience and the PC platform. The Zune service gives consumers convenient and unlimited access to the music they want, and also connects them to other music fans and expert sources to help them find the music they will love. The new enhancements to the Zune Pass subscription service offer unprecedented value for all music fans.

“The subscription model continues to redefine the digital music landscape, and today’s announcement is great news for consumers, artists and labels,” said Simon Renshaw, chief executive officer of Strategic Artist Management (representing Dixie Chicks, Miranda Lambert, Everclear, Tila Tequila and Aly & AJ). “This breakthrough offer makes it easier than ever for consumers to discover new music and will encourage deeper engagement in the digital music space, and that is good for the entire industry.”

A Zune Pass gives a subscriber access to millions of tracks that can be streamed or downloaded from a PC or directly from a Zune device when in a wireless hot spot. Downloaded music can be shared among up to three PCs and three Zune devices. In addition to unlimited downloads, consumers now also get to select 10 free tracks per month to keep and add to their permanent collection. These tracks can be burned to a CD or moved to other devices even if their subscription ends.

Since the launch of the Zune portable media player and music service two years ago, Zune has invested in improving the subscription model and the discovery experience it brings to life. With the recent launch of Zune 3.0, Microsoft built additional value into the Zune Pass offering by adding new features focused on music discovery and personalizing the music experience for each user:

• Mixview. Customers can select an artist, album or listener from the Zune Social online music community to activate a dynamic visual mosaic of related music and listeners. With each click, users can take the view in a new direction. Mixview works with users’ current collection of music, in addition to tracks and albums from across the Zune Marketplace.
• Zune Channels. Subscribers can explore dozens of channels programmed by genre; explore sources such as Billboard Hot 100, The FADER magazine and KEXP radio; or access themed channels, like fitness, to get a steady stream of new music added to their collection automatically. Zune will even create custom channels for each user, based on favorite artists and genres.
• Personal Picks. Now the Zune software learns what kind of music users like and makes personal recommendations. Each week Zune suggests artists, albums and tracks based on the music each person has been listening to, as well as channels they might enjoy and listeners like them in the Zune Social.

To give people a chance to experience the Zune Pass subscription, Zune is offering a free, 14-day trial to all new customers. More information is available at http://www.zune.net/free .