Microsoft lets Zune music subscribers keep tunes

REDMOND, Wash. (AP) - November 20, 2008 The decision may appeal to people who have been reluctant to test out the subscription model, preferring to own their music instead of rent it. Microsoft's Zune Pass, RealNetworks Inc.'s Rhapsody and others give users unlimited access to millions of songs in exchange for a monthly fee. But as soon as the user stops paying, the music stops playing unless he or she forks over extra money to buy each track.

With the new Zune Pass perk, subscribers can use the Zune desktop software as usual to buy individual songs, and the service keeps track of how many free ones remain for the month. In most cases, the song will come in the MP3 format, which can be freely copied to multiple devices and computers.

"I think the 10 free tracks is going to be a huge accelerant" to subscriber numbers, said Adam Sohn, Zune's marketing director. "People will enjoy owning that music, and I think they'll be more apt to transact more in the store."

The company did not disclose how many subscribers it has. Microsoft's Zune is a minor player compared with Apple Inc.'s line of iPods. Apple snagged 71 percent of MP3 player sales from January to September of this year, to Microsoft's 3 percent, according to market researcher NPD Group.

Microsoft and Apple both sell digital tracks for 99 cents, but so far, Apple has resisted the idea of a subscription service while Microsoft has tried to use it as a way to stand out.

The Orchard, a large independent music distributor who signed onto the new plan, said it hoped the offer would create more demand for its artists, who are paid a larger proportion of subscriber fees the more their music is accessed.

"What I want on behalf of our artists and labels are larger audiences that they can monetize in lots of different ways," said the Orchard's chief executive, Greg Scholl. "There's a lot of different paths to the waterfall."

Microsoft also said late Wednesday that it signed deals with two major music labels, Sony BMG Music Entertainment and Universal Music Group, so that Zune users can buy MP3-formatted songs, not just ones protected with digital rights management software.

EMI Music and Warner Music Group, along with many independent labels, already allowed Microsoft to sell their catalogues as MP3s.

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