Microsoft Unveils Their New Streaming Service…

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Apple Music has been getting a lot of attention, so Microsoft wants to remind everyone that they have a streaming service too.

The new Windows 10 will include a music streaming service called Groove, named after a brand Microsoft bought around 10 years ago.

Groove is basically just a rebranded Xbox Music, and Xbox Music Pass subscriptions will automatically become Groove Music Passes.

The rebrand will come to PCs first and then will roll out to other devices. Users will be able to upload their music libraries via OneDrive for listening on other devices, such as Windows Phone, Xbox, and even iPhones and Androids in the near future. This is similar to Apple’s iCloud Music Library.

A Groove subscription will cost $9.99 a month or $99 a year. Microsoft says Groove has over 40 million tracks.


Nina Ulloa covers breaking news, tech, and more: @nine_u

21 Responses

  1. Anonymous

    Another monster SHARK has swum to $15B (in 2025) of all inclusive global streaming SWAMP!

    Inflation adjusted 1999 CDs are worth today $60 billion.

    Little respect to music, musicians, and song writers! With little creativity and “monster SHARK” team work we can harvest $200B of music per annum! Wake up big boys if anything to your GREED!!!

    • Me

      So, what you’re saying is that the music industry has jumped the (monster) shark.

      • Remi Swierczek

        Monster sharks: Google (w/YouTube), Pandora, Spotify, SiriusXM, Apple, Deezer, Amazon and now Microsoft are blinded by Daniel Ek’s religion of all inclusive streaming or own advertising stupidity!

        • Remi Swierczek

          Merry this “monster shark” NERD land with Shazam style and lyric ID NERD land and $15B music swamp has a chance to become healthy $200B music industry by 2025.

          Again, L. Greinge and D. Morris have to go!

  2. Anonymous

    We should take bets on how long until FB announces its own new streaming service.

    The reality is that long term it’s devastating for the music industry for ANY of the unlimited subscription streaming services to become strongly dominant in terms of user base.

    Until other business models for streaming are introduced, you should be hoping for as much competition between these unlimited subscription sites as possible.

    • Remi Swierczek

      Total success of all inclusive streaming means THE END of music industry!

      300M subs @ 4.99 global AVG/sub equals just $18B. Terrible outcome for proven Ek’s business model!

      300M sub might NEVER happen.

      Mr. Grainge and Mr. Morris HAS TO GO !

    • Troglite

      I think you raise a very interesting point. If you don’t mind, I would like to add to it.

      Everytime a new streaming service is launched, it’s basically a new road to the same destination…. the major label’s catalogs. So, while it may weaken other streaming services through additional competition, it only strengthens the rights holders (especially the owners of the masters).

      And this lead us to question who is really benefiting from the current rise in these “ad-supported, unlimited access streaming services”. The streamers are actually playing a very weak hand. Digital distribution is a business of razor slim margins. The major labels and independent artists can transform their business every time their contracts come up for renewal or by simply pulling their works when a better business model arises.

      For artists, I think the largest challenge currently lies within the concept of “unlimited access”. This is the honey that is intended to draw consumers away from pirated downloads. It represents a huge business risk. The labels have pushed most of this risk onto the artists by making the pay rate for each stream variable based on the total number of streams across all artists. In other words, the value of a song now changes from day to day, week to week, month to month based on activity that has nothing to do with the artist, their work, or their fans.

      So, I think what we are witnessing is a marketplace that has been broken by piracy attempting to determine what a “fair price” is for music. I think that both labels and artists have more pricing power than they realize, but they are too scared to use that power for a variety of reasons (e.g. may empower the pirates). The labels are successfully pushing much of that risk onto artists and the streamers themselves.

      Once the major labels feel an adequate user base has been established, I believe they will change the rules of engagement in an effort to squeeze more revenue out of those users. I sincerely hope that includes rolling back “unlimited access” in favor of fixed rates per online stream, per offline stream, and per download. These could then be sold to consumers in bundles that approximate “unlimited access” (e.g. 500 streams per month for $x). I also hope artists push the industry in this direction by embracing any business that supports this type of pay structure and begin pulling their work from business that cling to the “unlimited access” model.

      • Anonymous

        If the adequate user base is established on a single platform, the labels won’t be able to change the rules of engagement.

        Imagine if Apple were the dominant streaming service, far larger than Spotify. Let’s say it has 100 million paying subscribers.

        Other sites fold or are greatly reduced in size. For all intents and purposes, Apple Music is now the music streaming equivalent of YouTube: it’s where all the traffic is, so you have to be there to get traffic for your music.

        Labels: there’s now a large, stable user base. Let’s negotiate to make Apple increase its prices, or at least move toward limited subscriptions.

        Apple: Apple Music helps drive iphone sales, where we make money. If we raise prices or change anything, we might lose users – who then might not have reason to buy our devices. No go, guys, prices are staying the same.

        Labels: but [lots of valid reasons for experimenting with ways of increasing revenue]

        Apple: you don’t like what we’re doing, leave and go somewhere else.

        Labels: but all the traffic is here and there are no other appropriate sites for us in any case. If we pull out of Apple Music we’ll lose fans and have to try to get consumers over to another site, and we’ll lose a lot of revenues during that transition period…. we can’t leave Apple Music, we just want you to change so we get what we want.

        Apple: No.

        And that’s it…. the only way for the labels to get latitude to experiment with prices and packages is for no service to be dominant.

        If Apple, Spotify, Microsoft, and Music Key all have user bases of reasonable size:

        Labels to Apple: We want to experiment with different business models for streaming, like limited content bundles.

        Apple: No

        Labels: Okay, we’re going to pull off every site that doesn’t let us experiment, and only keep our content on sites that let us have control. So you’ll have no content, and Spotify will have all of the content.

        Apple: Fine, let’s negotiate terms.

        If both Apple and Spotify refuse, there will eventually be another site that agrees – and that site can be made dominant if the labels pull from every other site. But if there’s a single dominant site with an adequate user base (whatever you peg that at), then the labels have no leverage. They aren’t willing to cut themselves off from income now in order to get greater income later, and that threat would be the only potential leverage available to them

        • Troglite

          Excellent points. I strongly agree.

          Mature, healthy markets typically have 3 – 6 dominant players. Consolidation will occur.

          If that consolidation produces only 1 – 2 dominant players, you don’t have a healthy mature market.. you have a monopoly.

          And in fairness, monopolies have negatively shaped the music industry in ways that are just as problematic as piracy. In addition to the major labels which have manipulated markets for as long as I can remember, iTunes and the iPod also effectively produced a monopoly… one that was strong enough to stand up to the major labels and set the market rates for digital downloads for more than a decade (~$1 per song). One way to understand or interpret the introduction of “Apple Music” is that it represents the end of the iTunes/iPod monopoly.

          Thanks again for sharing your thoughts!

          • Paul Resnikoff

            I think you are confusing monopoly with oligopoly, though during the arguable peak of major label market power, collusion on pricing, distribution, and talent may have helped to create a virtual monopoly. For example, if an artist was rejected by one major label, or failed on a major label, that artist’s chances of getting picked up by another major were very slim.

            In the area of streaming services, you will start to see considerable consolidation, but, the market dynamics I’d argue are far more complex.

          • Troglite

            Your vocabulary is larger than mine. Fair enough. As you point out, the effect on the market is essentially the same. In fairness, I’m also not sure that using the term “oligopoly” would have improved comprehension of the points I raised for most readers, either.

            But more importantly, I’d love to learn more about your perception of the “complex market dynamics” you described among streaming providers. To be clear, I am not arguing that point. I frequently simply descriptions in order to optimize comprehension. I’m just curious about the most relevant dynamics you feel will impact consolidation over the next 12 – 36 months in more detail.

          • Paul Resnikoff

            I’m not splitting hairs, because even in a pre-digital, major label dominated environment, keep in mind there was substantial competition. It was just among a limited group of companies, say half a dozen. That kept CD prices from being $24.99, led to bidding wars on talent (artist and executive), and pushed labels to specialize in certain areas (rock, pop, female, ambient, whatever).

            But the current era is so amazingly different, it’s difficult to compare. Pre-2000, basically, we were in a media environment largely defined by scarcity. Post-2000, we started to see a shift towards where we are now, which is the near-absence of scarcity. In that context, Apple Music is not only flanked by ten other viable competitors, but a nearly-endless supply of free content. This is something the labels are trying to change, with Apple’s help, but have been stymied. And it’s going to cost top executives their jobs, you watch.

            I’d argue, like many, that the world is heading towards streaming, non-ownership of recordings. But Apple has now put a powerful accelerant on that. As a result, you will see a more powerful devaluation effect on recordings over the next few quarters. Merlin and other independent consortia have very little power here; they even had limited power getting Apple to stop paying *nothing* on its free trial (remember Taylor Swift accomplished that, not Martin Mills or Charles Caldas). But Merlin’s dues will decrease substantially heading into 2016; it will be much harder for these labels to squeak out a living, no matter how much they claim to be benefitting from streaming. The actual balance sheets typically don’t show this.

          • Troglite

            Thanks for taking the time to respond Paul. You’re right, the past is the past. You’re also correct to call out some of my hyperbole. I’ve returned my baggage to the early ’90’s where it belongs. :)

            My real intent is to improve my understanding of the current reality so I can better identify opportunities to contribute toward meaningful improvements that balance the interests of all parties.

            “Scarcity” = supply. I see your point. Digitization by its very nature produces an explosion in supply. Anyone can create and upload their own CD-quality recording. Distribution costs plummet allowing almost anyone to start their own distribution or streaming presence resulting in an explosion of “free” access points (ad-supported piracy). Consumers and business both consume more which leads to more licensing opportunities.

            “Taylor Swift”. You really caught me by surprise with this one. I believe in one of your previous comments on that topic you asserted that Apple was already worming on those changes and that her twitter campaign simply accelerated the announcement. That made perfect sense to me b/c if I put myself in Apple’s shoes, I can’t think of a better marketing opportunity to get out in front of a rapidly escalating issue that threatened the launch of Apple Music. I personally think the lesson to be learned from Miss Swift is that windowing should be part of any established artist’s strategy and never pass up an opportunity to piggy-back on someone else’s press coverage.

            “Executives are going to lose their jobs”. Yup. But, I tend to chalk that up to a financial climate that focuses almost exclusively on short term quarterly performance. When that’s the only definition of success, both businesses and individuals are gonna get burned during the type of market corrections and inflection points you describe. I have found this to be true in ANY industry. But, it is a bit worse in this case because the only companies I am aware of in the US stock market that are sacrificing short-term profits for long term market share are the same companies launching major streaming initiatives. Amazon has intentionally disregarded short term profits for several years now. Apple, Microsoft, and Facebook have balance sheets that allow them to outspend everyone else and still satisfy the demands of Wall Street.

            And if we add that to your assertions about supply, that does seem to round out the picture.
            * Oversupply results in too much content with too little control
            * Transitioning from an old business model to a new business model is going to hurt a lot of good people.
            * Hangovers from legacy issues because the old business model never really worked that well to begin with

            Its easy to intermingle these topics. After all, outdated copyright laws are a legacy issue but they impact attempts to address the first two areas of concern. But for me, separating these concerns helps clarify these discussions. I think bringing clarity to these topics is going to be increasingly important within any effort to promote positive change. Considering most fans equate “professional musician” with “rich celebrity” and most musician’s don’t understand their own contracts, the need to rapidly educate both consumers and musicians seems unquestionable to me.

        • Anonymous

          “Apple Music is now the music streaming equivalent of YouTube”

          Not even close — YouTube is the world’s biggest music site because

          1) It’s a video site.
          2) The videos are free (which means they go viral if they’re any good).

          Facebook TV, or whatever they’ll call it, is the only potential competitor.

          :) The real Anonymous :)

          • Anonymous

            That was posed as a hypothetical situation, not a statement of fact.

          • Anonymous

            “That was posed as a hypothetical situation”

            …and it will remain that way because

            1) It’s not a video site, and
            2) It’s not free (which means content can not go viral).

            :) The real Anonymous :)

  3. Anonymous

    Another big tech company rebrands a languishing 9.99/mo streaming service. Can we expect a “99 Reasons Groove Will Fail” article, or does this one pass DMN’s rigorous standards of streaming acceptability?

    • Paul Resnikoff

      If I wrote that article, I’m not sure I’d even get 99 people to read it.

      There’s another point that I think people are missing here. Apple Music, in intense competition with Spotify and YouTube, will effectively eviscerate the paid download within the next few quarters. I’m not sure indies really get this, but that’s basically the last solid recording revenue generator they have.

      Indie consortia like A2IM and Merlin agreed to Apple’s $0.002 rate not because it was good, but because they have no choice. But they’re on a death march: you’ll see a lot of labels go under in the next year, easily, and groups like Merlin losing even more power again ultra-powerful tech giants like Apple. This is going to be a difficult Christmas for those groups.

      • Rfil

        I believe they are aware of it but the FOMO is intense and many believe Apple has been a reliable partner to them in the past so they take the leap.

        I agree about Merlin losing power as a result. If I’m not mistaken, they do not actually have a deal with Apple, though they “endorsed” the deal, paving the way for the Brit indies to sign on. If the market gets consolidated around Apple, and platforms Merlin has deals with are marginalized (or cease to exist) as a result, well you do the math.

  4. buhwahhh?!

    They should have named it something with more pizazz.

    Like Bing Music… Or Live Music, Or maybe “please think we’re still hip” Music.

    • Anonymous

      Or “Please think Jobs is still alive”…