Follow your muse, Microsoft--get out of hardware

Microsoft's Zune initiative always felt more like a calculated commercial play, not something about which the software giant felt passionate.

Matt Rosoff
Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff.
Matt Rosoff
3 min read

About a year ago, I blogged about a study conducted by Yahoo researcher Duncan Watts showing that there's almost no link between quality and popularity in music.

In that study, if subjects could see how other subjects were voting on a particular song, they tended to vote the same way. Each song's popularity had almost no correlation with "objective" quality, as measured by a control group who voted based on ears alone.

The Zune never felt like a labor of love. Microsoft

Music industry blogger Bob Lefsetz took this point a bit further the other day in a post advising young musicians that they shouldn't pin their hopes on the traditional gatekeepers of the music business--the record labels, radio programmers, and so on--because these folks are interested only in what they can sell, not what's good.

Lefsetz wasn't exactly advising kids to sell out; he was warning them that if they follow their muse, they shouldn't expect success. Heck, calculated commercialism seems to have worked out fine for Billy Joel.

This drew a response from legendary producer Bob Ezrin, who produced Pink Floyd's The Wall, Lou Reed's Berlin, and a lot of Alice Cooper's albums. He argues that fledgling musicians have to follow their muse, not only because it's the only way to lasting success, but because most young musicians don't have enough mastery to aim for a particular genre or market, anyway.

As Ezrin put it, "No one is born a hack. Hacks are failed or jaded artists, each and every one." (Case in point: Jane's Addiction's last album, Strays, recorded a decade after the band's heyday, minus the essential sound provided by original bassist Eric Avery, and produced by...Bob Ezrin.)

Here's how I'd break it down. Making a decent living--much less making millions of dollars--as a pop musician has about the same odds as becoming an NFL football player. If you follow your muse and fail, at least you've had fun and can look back with pride. If you try to sell out and fail, you're left with nothing.

Which brings me, in however so roundabout a way, to the poor, nearly departed Zune. I'm sorry to see that Cesar Menendez, who was in charge of Microsoft's Zune Insider blog, was included in the company's recent layoffs. I know that there are many passionate music fans working on the Zune team, not least of all Kyle Hopkins, aka DJ Kid Hops, who produces not one, but two, consistently amazing shows on Seattle community radio station KEXP.

But overall, I agree with fellow CNET network blogger Matt Asay: the Zune initiative always had a "me too" feel, as if somebody high in the ranks at Microsoft decided that the company needed an answer to the iPod for business and strategic reasons, but didn't have any particular passion for music, or MP3 players, or even hardware. Everybody saw through it, right from the beginning.

As CNET News' Ina Fried uncovered, Zune revenue over the holiday quarter was anemic. If you run the numbers, it looks as if the company earned $85 million from the Zune in the December quarter.

Given an average price per unit of about $150, that means that Microsoft sold a little more than half a million units. And that was in the peak quarter. Compare that with 22.7 million iPods, and it smells an awful lot like failure to me.

Microsoft's passion is software, not hardware. It's time for Microsoft to follow its muse and get out of the hardware business.