KEY POINTS:
Not long after Microsoft announced in July that it would challenge Apple Computer's iPod, internet blogger Craig Lile found himself on a flight to Seattle to get a first look at the competing device.
Lile, 29, who writes under the pen name Dodge, was one of six tastemakers
from the independent music scene hand-picked by Microsoft - and given free airfares and accommodation - to check out its Zune player, which goes on sale next week.
Microsoft says it can crack iPod's monopoly on "cool" by harnessing key web reviewers such as Lile and sponsoring band tours to court fans of so-called indie music. Emerging fringe bands on independent labels can sway the larger market, Microsoft says.
But Apple controls 77 per cent of the US$4 billion ($5.9 billion) US market for digital-player sales so gaining converts may be difficult.
Lile's own conclusion about Zune won't make it any easier.
"It's really not anything that impressive," said Lile, an Indianapolis-based web developer who writes My Old Kentucky Blog.
"They're going to do terribly, at least in the demographic that cares about indie music. Apple is so entrenched in the indie music community."
Microsoft, which will sell Zune for US$250, is trying to attract people aged 18 to 28 with an FM-radio tuner and the ability to beam songs from one device to another, features the iPod doesn't have.
Apple, which sells a US$250 video iPod with the same amount of storage, doesn't comment on its marketing plans.
Michael Gartenberg, a New York-based analyst with JupiterResearch, says Microsoft's focus on less mainstream music fans may be too narrow.
"They are going to have to find a crossover strategy really fast," he said. "If you're not a fan of independent bands no one has ever heard of, this isn't the device for you."
Microsoft, the world's biggest software maker, sees the strategy as a way into a market in which Cupertino, California-based Apple has already formed partnerships with music giants including U2 and Bob Dylan.
"If we opened on day one with the largest, most popular artists, that wouldn't give us authenticity," said Chris Stephenson, Microsoft's Zune marketing general manager.
"You can think of a world where Jessica Simpson and Britney Spears are all your brand is about. Our brand is about that too, but we don't want that to be all we're about."
While Zune's online digital music store will offer songs from big artists just as Apple's iTunes store does, Stephenson says he first wants to win over "influencers".
The Redmond, Washington-based company has ramped up marketing efforts with the first of more than 15 different television ads.
Stephenson declined to disclose the budget.
Microsoft isn't putting its name on Zune or the related ads.
That distancing didn't give Zune a reprieve among Lile's web readers. Hours after he posted a straightforward entry describing Zune's features and his Microsoft-sponsored trip, a reader posted a comment complaining that it read like an ad.
Stereogum, another music site that sent a writer to Seattle, also came under fire. "When did Stereogum become so ... sponsored?" asked a reader identifying himself as Nick.
Now, Lile says he may decline Microsoft's invitation to a larger Zune event this month after the feedback. Stereogum founder Scott Lapatine declined to be interviewed.
When Zune hits stores, about 140 paid college students designated as "Zune ambassadors" will fan out on campuses to organise parties and events, Stephenson said.
Microsoft is also funding tours from bands such as Brazil's CSS, or Cansei de Ser Sexy (Portuguese for "tired of being sexy").
The group is known for the profane broken-English lyrical stylings of lead singer Lovefoxxx.
Microsoft's overtures are winning over some. Grant Purdum, managing editor for the web magazine Tiny Mix Tapes, said he was suspicious when he went to the September preview event and now thinks Zune is "a very nifty device".
He said he was impressed with Microsoft's commitment to lesser-known bands and music sharing. Shared songs expire after three days or three plays.
Zune comes pre-loaded with music and videos from bands such as CSS, Hot Chip and Band of Horses. None of those artists' albums have sold more than 48,000 copies in the US.
Other independent artists sold 100,000 or more albums, said Nic Harcourt, host of public radio station KCRW's Morning Becomes Eclectic show in Santa Monica, California.
He said it was a mistake to write off indie music as a niche market.
"It's a demographic that is going to be receptive to something new and different," Harcourt said.
"But having said that, these kids likely already have an iPod."
"Apple is an incredible brand," said Stephenson. "It's a hard challenge even for a company with the resources we have.
- BLOOMBERG
