Microsoft's first Zune hardware launched in late 2006, around five years after the initial Apple iPod hit the market and less than a year before the iPhone changed the smartphone industry. Former Microsoft executive Robbie Bach, in charge of Zune at the time, says he would skip portable media players if he could launch Zune again. "The portable music market is gone and it was already leaving when we started," admitted Bach at an entrepreneurs' event in Seattle last week. "We just weren’t brave enough," he says, accepting that Microsoft ended up chasing Apple without a compelling reason for consumers to purchase Zune hardware.
"I think our marketing message was very confused."
Bach says he would have attempted to push Microsoft's Zune software into its Windows Mobile team, to be part of a music service for its phones at the time. Microsoft has since launched Windows Phone, which includes access to Zune services on a range of handsets. So, why did the Zune fail? Part of the problem, says Bach, was that the music industry appeared to be dependent on Apple. "The music industry just didn’t get it," he says, describing them as "hooked on the drug of what Apple was supplying." Although the music industry was focused on iPod, Bach feels Microsoft's Zune marketing message was very confused. "I don’t think people walked away saying, this is what Zune is and this is why it’s different. This is why I have to have it." Ultimately, this mixed marketing message and failure to ensure devices were available widely outside the US led Microsoft to focus on Windows Phone and kill off its Zune hardware. Microsoft is now simplifying its efforts towards Xbox as its core entertainment offering, and is expected to unveil a "Woodstock" music service this year.
Bach also led Microsoft's entertainment division during the creation of its Xbox console. Discussing his time working with Bill Gates, he reveals that the Microsoft co-founder thought it was crazy to remove a modem from the original Xbox. "We had a three-week email debate, and had to go back and have a meeting and convince Bill that taking the modem out was the right thing," says Bach. The Xbox went on sale in late 2001 in the US, and the early Xbox Live service (powered through an Ethernet port) led to the increased popularity of its successor — the Xbox 360. Some of Microsoft's success with the Xbox was also due to Sony's failing, according to Bach. "They mismanaged their 70 percent market share," he claims. "The transition to PlayStation 3 was really, really bad. And really hard." The Xbox 360 has gone on to secure the top spot as the best-selling console in the US for 16 months now, with 66 million consoles sold and over 40 million Xbox Live members. In comparison, Zune's failure demonstrates the difference between good and bad execution.