Zune Marketplace’s Absurd Pricing Scheme

Lately I have been trying to avoid talking about Microsoft. I figured the whole Zune thing had been covered to death and so my input wasn’t really needed. I continued to think this until I read about Microsoft’s “Zune Marketplace”. This iTMS competitor was so badly designed I just had to write something about it. Even though by now I expect Microsoft to be incompetent, this was taking ineptitude and elevating it to an art form. But let me lay out the facts for you lest we get ahead of ourselves.

As we all know, purchasing songs, videos or games from the iTMS only requires a customer to create an account and have a valid credit card. Thus, like most other business transactions, you purchase a good and the price of that good is billed to your credit card. It works the same way at the grocery store, at the gas station or in a restaurant. And for the most part it seems like a pretty good system. Plenty of people have credit cards and they understand the concept of purchasing items with them. So, how, you ask, could Microsoft screw this up? No, first you might ask, what is there to screw up? I mean, the system already works. All you need your customer to do is show up with a credit card? Right?

Wrong!

I suppose Microsoft saw this as a chance to “innovate”. And we all know what happens when they innovate (in the 25 Worst Tech Products of All Time MS has many entries) This was one of those times when Microsoft should have just stolen the iTMS concept lock, stock and barrel. It would have been unimaginative, but at least it would work. Instead, they decided to go with the following scheme:

The 5 Step Plan To Fill Your Zune With Legal Music
1. Create a free Zune account
2. Register a valid credit card
3. Buy “points” from MS
4. Scratch your head as you try to figure out why you need to buy “points” to buy songs. Why can’t you just use standard American currency? Doesn’t Microsoft accept the Dollar anymore?
5. Say “screw it” and go buy an iPod

Adding a completely unnecessary layer of confusion is, in and of itself, a bad thing. But it wouldn’t be Microsoft if they didn’t go that extra mile to rape their customers. You see, when you buy these “points” you can’t buy them as you need them, you have to purchase them in Microsoft defined denominations. In other words, Microsoft just invented a currency and they require you to invest in this currency before they can sell you any music. And just if you were wondering, here are the denominations:

$5 = 400 points
$15 = 1200 points
$25 = 2000 points
$50 = 4000 points

But wait, it gets BETTER! There isn’t a 1 to 1 correspondence between the value of a “point” and the value of a penny. Let me break out some math for you:

If
$5 = 400 points
then
$1 = 80 points
therefore
100 cents = 80 points
meaning
1 cent = .8 points
or
1 point = 1.25 cents

So, let me explain why this is important. If Microsoft prices a song at 79 “Zune Points” is it cheaper than a 99 cent song from Apple? I don’t know, lets do the math.

79 points * (1.25 cents/1 point) = 98.75 cents (or approximately 99 cents)

So the answer is “no, the MS song isn’t cheaper, it is the same price as Apple’s”. So, that means, to find the actual price of anything on the Zune store you have to multiply it in your head by a ZP (Zune Point) factor of 1.25, and since the general populace isn’t to keen on doing math in their head I can only conclude that this will cause no small bit of confusion. But wait, it gets better.

If you recall $5 is the lowest denomination you can purchase. So if you want to buy one song from the Zune Marketplace you have pay Microsoft $5 up front and let them keep your remaining 321 points (or $4.01, this is beginning to get confusing).  Now, the expectation is that you will be back purchasing more songs (and more points) and so you won’t care about your balance. But, what you are in fact doing is giving an interest free loan to Microsoft (because they, of all companies, need the money).

Of course, you could just spend all of your points each time you buy music, but would require you to purchase songs in multiples of 31,600 points (that being the LCM of 79 & 400). That works out to 400 songs for $395. A better plan would be to buy 5 songs for 395 points (or $4.94) and just save your 5 remaining points for some future purchase. In effect, Microsoft has created a store that only accepts gift cards as the valid method of payments. And if you don’t think thats insane then you obviously already have pre-ordered your Zune.

I know what you’re thinking. Why would Microsoft do this? Perhaps to screw customers out of their money by creating a complex, uselessly confusing layer designed to hide the real price of their products? No, of course not. Why, according to Zune.net the reason is:

The Points that you purchase can be easily managed in a special account that you can use on Zune Marketplace and Xbox Live Marketplace.

Well there you go. It isn’t targeted at average consumers it is targeted at these special Marketplace users. So how many of theses users are there? To figure that out we need to know how many Xbox Live users are there. Well, there have been 24 million Xboxes sold and almost 6 million Xbox 360s sold (as of Sept. of this year). So, if every Xbox owner also buys a Zune, and they also decide to use both Marketplace services (or else what’s the point?) then this service will be useful to, at most, 30 million people. That assumes that all of those people who bought Xboxes outside the USA fly over here and buy a Zune (because the Zune is US only baby!) and then use that Zune in America to load up on their music. (presumably they can then fly home and enjoy their music, assuming of course, that they can both read English and enjoy American music, but whatever)

A more realistic figure is Microsoft sells around 2 million Zunes and maybe half of those users also use the Xbox Live Marketplace. So, this horrible system has been put in place (according to Microsoft’s logic) to make life easier for less than 1 million people.

“Welcome to the Social”, b***h!