Zune exec on phone future, new iPods

There are a number of businesses where Microsoft is playing catch-up these days. But arguably one where the company starts furthest behind is in the music business, where it decided two years ago to scrap its partner approach and go it alone with the Zune in its effort to catch the iPod.

I had a chance on Monday, not just to play around with the latest crop of Zunes, but also to talk strategy with Joe Belfiore, a longtime Microsoftie who moved over earlier this year to head Zune development. I also followed up with him on Wednesday, following Apple's announcements, to get a few more thoughts. (At the end of this post, I've also embedded my video interview with him from Monday.)

In particular, I pressed Belfiore to talk more about how Microsoft plans to unite its still disparate entertainment projects. Microsoft has talked a great deal about the notion of having your content wherever you are and, unlike many companies, it actually has products for the TV, the den, the living room, the car, and the phone. However, to date, few of the company's services really let you take premium content from one place to another.

Belfiore conceded that is true today, saying that the company has focused on improving its individual device experiences first, but he said the company is putting in place mechanisms to allow a more unified experience over time.

"The video store that is in Zune today is the same...back-end as the video store in Xbox today," he said. "While it is true you can't buy a video on an Xbox today and put it on your Zune, We're not really that far off technologically from being able to offer that feature."

There are a variety of hurdles, he said, not all of which are in Microsoft's hands, such as licensing rights. There's also the issue that the numbers of people with multiple devices, say a Zune and Xbox or Zune and Mediaroom IPTV box, aren't that large.

"As more and more people have more than one of those devices, then the cross-device scenarios become more important, and undoubtedly it is something you will see us do at some point in the not-too-distant future," Belfiore said.

Here's what Belfiore had to say in response to some other questions:

Q: What do you think of what Apple announced?
Belfiore: I think that if I am someone who is going to be shopping for an MP3 player this holiday, after hearing the announcements, I am definitely going to be giving Zune a good look.

I think Apple has continued to do some nice hardware engineering. The colors are attractive; there are some new hardware features. I definitely think from the perspective of software and services that bring the whole experience to life, our offering is very competitive. We see Apple doing a recommendations feature and we've got a recommendation feature that not just recommends things to buy and gives you things from your collection, but aggregates what your friends are listening to...and if you are a Zune Pass subscriber, we'll give you whole songs to listen to without you having to do any work at all. We think from the perspective of the music enthusiast we think that is a great feature where we compare favorably.

Why did Microsoft get in the Zune business? Why is it an important business to be in?
Belfiore: We think the possibilities for creating value for people around how they are entertained...is incredibly important. The potential for doing great things for people is huge. It can affect a wide range of devices, from portable devices that you carry around to devices that are hooked up to your TV to devices that look like what you think of as your PC or laptop today. We aspire to really making people's lives better in the way they are entertained. Being able to create those connections between people and get them content on whatever kind of device it is, we think is important and compelling and worth doing.

When you look three or five years out, should I be able to go to my car, go to an Internet cafe, go to my phone without any preloaded content and be able to access any content that I have purchased or my personal content?
Belfiore: A good theory for us is pretty close to what you just described--where you can sign into the service and all the music that you like is available immediately to you wherever you are. The videos that you like are available to you wherever you are. And you have ways of trying new things and finding new things because your friends, people you respect, people who are pundits or critics in the industry are all available. It's not simply about passively experiencing the same thing over and over again--unless that's what you want--it's also about discovering new things and being engaged with people.

If you think about Xbox Live as an example. For years and years and years people played games by themselves or with two other friends in the same room. Today there's leader boards and badges and reputations and you can be on a headset playing against somebody halfway around the world. It's the same idea as that, but let's do that across entertainment types.

Obviously the device that the most people have with them at any given time is the mobile phone. How do you guys think about that?
Belfiore: The phone is certainly an interesting device for doing entertainment types of things. It's a device we continually look at trying to improve. We don't have any announcements about what we are doing on the phone at this point in time. We're excited about the progress we've made with Zune and stay tuned.

How important is the car as a place for enjoying entertainment?
Belfiore: I think the car is super-important. For me personally, the two places where I listen to music more than anywhere else are (in) the car and running.

There's a lot of work at Microsoft that we've been doing on the car. The Ford Sync product...has been very successful for Ford. What it tries to do is integrate entertainment experiences and communication experiences in a really seamless way that is optimized for you while you are driving. You just talk to it. We definitely see that as an important, highly used environment for entertainment. We think that the products we have today do a pretty good job and there's lots of room for us to keep doing really great stuff.

What made you want to take the Zune job?
Belfiore: I have been a digital media enthusiast for a long time. When J. (Allard) was moving on and they needed someone to help with the creative direction and execution on Zune, I was excited to go be a part of that. I think Zune is a great opportunity for us to do groundbreaking work.

If you had one hesitation, what was the biggest worry or concern?
Belfiore: The truth is, I didn't have much hesitation. Zune certainly faces a difficult competitive situation but Microsoft has been in that situation many times before and it is an exciting place to be.