New music service from Microsoft

On October 16, 2012, the Microsoft released Xbox Music Internet service for its Xbox 360 game consoles.  Its previous service, Zune, failed to compete with other similar services.  They expect to extend the service to PCs with its new operating system, Windows 8.  The new music service will be free on PCs and tablets and will be supported by ad-revenue.  Microsoft will recover its cost through advertisements.  However, Microsoft will charge $9.99 a month ($99.99 a year) for unlimited number of tracks commercial free on smartphones that run on Windows Phone 8 and game consoles.  Microsoft has a catalogue of 30 million tracks and 19 million will be available in the U.S.  This is the latest attempt from Microsoft in a series of music related releases recently.

Microsoft has an enormous collection of songs for the customers.  With the introduction of the new service, Microsoft is expecting to compete with Apple’s iTunes and other service providers such as Pandora and Spotify.  Spotify has four million registered subscribers and earn $234 million a year.  The internet music pioneer Pandora Media earns $101 million a year and $59 million of it comes from mobile units.  It has 55 million active users.  The Apple’s iTunes is the industry leader through its iTunes Store.