Microsoft enters the music biz with MSN Music and a tuned-up version of Windows Media Player software. Should Apple be worried? Not yet.
By Peter Lewis

(FORTUNE Magazine) – DON'T YOU HATE IT when a band covers your favorite song with a new version that's inferior to the original? Microsoft's new music service, MSN Music, which makes its debut in mid-October, is not nearly as bad as, say, William Shatner covering the Beatles' "Lucy in the Sky With Diamonds," but it's no Apple iTunes Music Store either.

It's just a bit bland and initially limited in range, which isn't too surprising given Microsoft's track record of releasing software that doesn't show its full potential until version 3.0. The surprising thing is that even with nearly a year and a half to scrutinize Apple's popular, market-leading iTunes Music Store and come up with a challenger, Microsoft's MSN Music arrives with a minimalist--some would say boring --interface and, in the test version I've been using, fewer choices of artists and downloadable 99-cent songs than Apple offers. Microsoft asserts that more than a million songs have been licensed, including some from the Dave Matthews Band and (yes!) Radiohead, which don't show up in the iTunes store. "We're stocking the shelves," a Microsoft spokesman said. But there are no audio books, no Billboard charts, no celebrity playlists, and no gift cards or other goodies of the sort that make other online music services more fun to use.

Even so, MSN Music surely will take a bite out of Apple's current 70% share of the legal download market, mainly because it works harmoniously with Microsoft's new Windows Media Player 10 software, a very good (and free) upgrade that's worth adding to any computer running Microsoft Windows XP. All new Windows-based computers will soon come with Windows Media Player 10, which makes beautiful music together with MSN Music in the same way that Apple's iTunes and the iTunes Music Store form a nearly perfect duet.

MSN Music is web-based, accessible either through a browser--Microsoft says any browser, not just its own Internet Explorer--or, for the best experience, through Windows Media Player 10, which has been redesigned to allow easier "rip, burn, and sync" operations. In fact, fuddy-duddy Microsoft has finally adopted those terms on the menu instead of "copy to PC or other device." And at last WMP 10 offers the option of ripping to MP3 files--a few years late, true, but hey, seeing a geezer bust some new moves on the dance floor makes me smile.

MSN Music does strut its stuff from time to time. The audio quality of the downloads is excellent: 160Kbps variable-bit-rate Windows Media Audio (WMA) format, for those who speak geek. There's a good selection of online radio stations from which to choose. The digital rights management (DRM) restrictions are relatively generous, allowing playlists to be burned to CD up to seven times and songs to be played on as many as five different Windows PCs, along with unlimited transfers to dozens of WMA-compatible portable music and media devices. With Apple, it's the iPod only.

Microsoft has done a better job than Apple of creating a music resource center, with album reviews, artists' biographies and discographies, photos, news, links to tour schedules and tickets, song lyrics, and music videos.

On the downbeat, purchasing music requires the user to sign up for a Microsoft .Net Passport, the online equivalent of a national ID card. It doesn't impede the process of buying music once you have signed up, but some people are uncomfortable letting Microsoft store their personal information.

Overall, MSN Music is a decent service that lacks the flair of rivals including iTunes, Musicmatch, or Napster. Microsoft says it plans to add more music and features in future versions.

Windows Media Player 10, in contrast, is Exhibit W of the Microsoft "if at first you don't succeed, try, try again" school of software development. Windows Media Player 9 was so anemic that it was often referred to as WiMP 9, but version 10 is much more robust. Unlike Apple's iTunes, WMP 10 is truly a media player, capable of displaying music videos, album art, film clips, and photos as well as managing song libraries and radio stations. The user interface is much cleaner and more usable than the one found in WiMP 9. Besides the "rip, burn, and sync" streamlining, version 10 adds a windowpane on the right that displays the user's entire media library, including photos, movies, and music.

One big surprise is the addition of a "media mall" where one can shop for music and movies to download, and not just from the Microsoft company store. Initially there are just a handful of third-party stores at the media mall, but they include Napster, Musicmatch, the Wal-Mart music store, and others to come. The video store in the mall is run by CinemaNow. I've not been a fan of watching movies on computer screens except in times of duress--the popcorn leaves crumbs on the keyboard--but the arrival of new, portable media players from Creative, Samsung, and other consumer electronics companies may change that. WMP 10 was designed to work seamlessly with such small-screen devices, often erroneously called "video iPods." Download a movie, synchronize it through WMP 10 to a handheld device, and you're better prepared for that unexpected three-hour layover in Detroit.

In my view, the best portable media device is Toshiba's new Qosmio (koss-me-oh) laptop. It weighs seven pounds more than a handheld portable media player, but it's also a vastly superior experience.

I've been testing MSN Music and WMP 10 on a 15-inch Qosmio Windows XP Media Center Edition laptop ($2,700), which has a dazzlingly bright screen and the best built-in stereo sound of any laptop in the Windows world. Yes, it's a thoroughly respectable, business-suit-compatible Windows XP--based laptop, more than capable of trudging through a spreadsheet. But switch to the Media Center Edition interface, and prepare to be wowed by Qosmio's media capabilities. Because it's a Media Center PC and comes with a built-in TV tuner, it can double as a digital video recorder (and it even comes with its own remote control for times when you want to put your feet up on the desk). Best of all, the Qosmio has special media buttons that allow you to play a music CD or watch a DVD without booting up the Windows operating system.

The Qosmio's Harman Kardon TruSurround speaker system creates the illusion of a three-dimensional sound field. The display, meanwhile, is so vibrant that I suspect even PowerPoint presentations would be fun to watch on it. (Well, maybe not, but you get the idea.) The only bummer, other than the relatively steep price, is that the screen has a conventional "square" shape, although Toshiba says that it will eventually come out with wide-screen 15-inch and 17-inch Qosmios. The 17-inch model in particular might make an ideal "media center" for a dorm room, an apartment, or an office. Just don't annoy the neighbors by playing Leonard Nimoy's Spock-like rendition of "Proud Mary."