WEBVTT 00:00:00.000 --> 00:00:02.740 Okay, I want to start this deep dive with a little 00:00:02.740 --> 00:00:05.580 psychological experiment. A word association 00:00:05.580 --> 00:00:08.460 game. Oh, I like this. Okay. I'm going to give 00:00:08.460 --> 00:00:10.900 you a single word, just one, and I want you to 00:00:10.900 --> 00:00:14.160 tell me the very first image, the most visceral, 00:00:14.160 --> 00:00:16.879 immediate picture that pops into your head. Don't 00:00:16.879 --> 00:00:21.800 overthink it, just react. Ready. I am born ready. 00:00:22.039 --> 00:00:26.260 Lay it on me. Oh, okay. Immediately, I see a 00:00:26.260 --> 00:00:29.760 brick. A brown plastic brick. Right. It is instantaneous. 00:00:29.800 --> 00:00:31.399 It's not even a question. You don't think of 00:00:31.399 --> 00:00:34.799 music. You don't think of software or the interface. 00:00:34.960 --> 00:00:37.619 You think of that specific distinctively muddy 00:00:37.619 --> 00:00:40.060 color. It's arguably one of the most memorable 00:00:40.060 --> 00:00:42.840 visuals in consumer electronics history. But 00:00:42.840 --> 00:00:44.920 for all the wrong reasons, it's the punchline. 00:00:45.060 --> 00:00:47.000 It really is. It's the scene in Guardians of 00:00:47.000 --> 00:00:49.759 the Galaxy where Star -Lord gets the Zune. And 00:00:49.759 --> 00:00:51.920 it's treated like this ancient alien artifact 00:00:51.920 --> 00:00:54.479 of failure. It became the cultural shorthand 00:00:54.479 --> 00:00:56.560 for the thing that tried to be an a**hole. iPod 00:00:56.560 --> 00:00:59.179 and lost. Exactly. It's the high profile underdog 00:00:59.179 --> 00:01:01.899 that never had its rocky moment. It's the device 00:01:01.899 --> 00:01:03.899 that you pull out of a drawer 15 years later 00:01:03.899 --> 00:01:06.079 and, you know, you laugh about it. You do. But, 00:01:06.200 --> 00:01:08.599 and this is why we are here today, I think we 00:01:08.599 --> 00:01:12.120 have completely misunderstood the Zune. I think 00:01:12.120 --> 00:01:14.400 the brown brick meme has actually obscured a 00:01:14.400 --> 00:01:16.659 much more interesting and frankly much more tragic 00:01:16.659 --> 00:01:18.799 story. I would agree with that completely. When 00:01:18.799 --> 00:01:21.400 you actually look at the documents, the internal 00:01:21.400 --> 00:01:24.239 strategy memos from Microsoft, the hardware specs, 00:01:24.579 --> 00:01:27.719 the review scores from the time and the postmortems, 00:01:27.780 --> 00:01:31.799 the story isn't. Microsoft made a bad iPod. No, 00:01:31.939 --> 00:01:34.280 not at all. The story is that Microsoft actually 00:01:34.280 --> 00:01:36.680 built the future of music streaming, packaged 00:01:36.680 --> 00:01:38.819 it in a device that was weirdly ahead of its 00:01:38.819 --> 00:01:41.219 time, and then accidentally set it on fire with 00:01:41.219 --> 00:01:43.939 terrible marketing and a few critical glitches. 00:01:44.000 --> 00:01:46.079 And that is our mission for this deep dive. We 00:01:46.079 --> 00:01:48.040 are going to move past the jokes. We're going 00:01:48.040 --> 00:01:50.239 to look at the Zune not as a failure, but as 00:01:50.239 --> 00:01:53.519 a fascinating case study in innovation, timing, 00:01:53.799 --> 00:01:57.560 and corporate hubris. For sure. We have a mountain 00:01:57.560 --> 00:02:01.140 of sources here. Tech reviews from 2006, retrospectives 00:02:01.140 --> 00:02:03.159 on the interface design, financial reports from 00:02:03.159 --> 00:02:05.680 the height of the MP3 wars, and even some deep 00:02:05.680 --> 00:02:07.560 dives into the code that caused it to freeze. 00:02:07.819 --> 00:02:09.780 And we're going to answer a specific question. 00:02:10.520 --> 00:02:13.300 How did a device that cost Microsoft billions 00:02:13.300 --> 00:02:17.360 of dollars end up saving their design soul? Because 00:02:17.360 --> 00:02:19.740 the DNA of the Zune is still running on the computer 00:02:19.740 --> 00:02:22.439 you use today, even if you don't realize it. 00:02:22.539 --> 00:02:24.639 So to understand the end, we have to understand 00:02:24.639 --> 00:02:26.860 the beginning. We need to set the scene. Take 00:02:26.860 --> 00:02:30.699 us back to the landscape of 2006. 2006. It's 00:02:30.699 --> 00:02:32.759 a different world. Twitter is just launching 00:02:32.759 --> 00:02:34.960 and nobody understands it. It's just people texting, 00:02:35.080 --> 00:02:37.319 I'm eating a sandwich to the internet. I remember 00:02:37.319 --> 00:02:39.439 that. Facebook is barely open to the public. 00:02:39.500 --> 00:02:41.979 It's still mostly just for college kids. But 00:02:41.979 --> 00:02:44.819 in the world of digital music, the war is over. 00:02:45.219 --> 00:02:48.180 And Apple won. Apple didn't just win. They salted 00:02:48.180 --> 00:02:51.050 the earth. By the time the Zune is preparing 00:02:51.050 --> 00:02:54.830 to launch in November 2006, the iPod holds a 00:02:54.830 --> 00:02:57.710 63 % market share of portable media players. 00:02:58.349 --> 00:03:00.969 63%. And that number actually understates it 00:03:00.969 --> 00:03:03.310 because in terms of cultural mind share, it was 00:03:03.310 --> 00:03:06.689 probably 99%. It was the Kleenex of MP3 players. 00:03:06.789 --> 00:03:08.810 You didn't say, I'm bringing my MP3 player. You 00:03:08.810 --> 00:03:11.129 said, I'm bringing my iPod. You saw those white 00:03:11.129 --> 00:03:14.090 earbuds everywhere. It was a status symbol. Exactly. 00:03:14.270 --> 00:03:17.319 And Microsoft is sitting there in Redmond. looking 00:03:17.319 --> 00:03:20.240 at this monopoly and they are panicking because 00:03:20.240 --> 00:03:23.659 up until this point, Microsoft had a very specific 00:03:23.659 --> 00:03:27.800 strategy for music and it was failing miserably. 00:03:27.939 --> 00:03:30.120 This was the place for sure era, right? Yes. 00:03:30.439 --> 00:03:32.780 And we have to talk about place for sure because 00:03:32.780 --> 00:03:35.479 it is the crucial context for why the Zune even 00:03:35.479 --> 00:03:37.939 exists. Even the name sounds desperate. Place 00:03:37.939 --> 00:03:40.240 for sure. It's like a car company calling their 00:03:40.240 --> 00:03:43.379 new model the it starts hopefully. It really 00:03:43.379 --> 00:03:45.120 does imply a lack of confidence, doesn't it? 00:03:45.530 --> 00:03:48.789 But the strategy was classic Microsoft. Historically, 00:03:48.830 --> 00:03:51.729 Microsoft is a platform company. They build Windows 00:03:51.729 --> 00:03:55.210 and they let Dell, HP, and Lenovo build the computers. 00:03:55.370 --> 00:03:57.229 The old model. They build the OS, you build the 00:03:57.229 --> 00:03:59.469 box. Exactly. They tried to do the same thing 00:03:59.469 --> 00:04:01.389 with music. So they had a DRM system digital 00:04:01.389 --> 00:04:03.710 rights management called Janus. And they had 00:04:03.710 --> 00:04:06.240 a music store called MSN Music. which launched 00:04:06.240 --> 00:04:09.280 around 2004. The idea was you buy a song from 00:04:09.280 --> 00:04:11.020 MSN, it's wrapped in Microsoft's encryption, 00:04:11.319 --> 00:04:13.379 and then you can put it on any device that has 00:04:13.379 --> 00:04:15.379 the Place for Sure logo. So who was making the 00:04:15.379 --> 00:04:18.120 devices? All the other guys? Everyone who wasn't 00:04:18.120 --> 00:04:22.939 Apple. Creative, Samsung, iRiver, SanDisk. There 00:04:22.939 --> 00:04:26.259 was this army of plastic gray rectangles flooding 00:04:26.259 --> 00:04:28.560 the shelves at Best Buy. I remember having a 00:04:28.560 --> 00:04:31.420 Creative Zen back in the day. It was fine, you 00:04:31.420 --> 00:04:33.899 know. It did the job, but it felt like a piece 00:04:33.899 --> 00:04:36.379 of lab equipment compared to an iPod. How so? 00:04:36.600 --> 00:04:39.579 It had distinct buttons, a weird menu system. 00:04:39.680 --> 00:04:43.300 It felt like a gadget, not an experience. It 00:04:43.300 --> 00:04:45.899 wasn't elegant. That was the problem. The user 00:04:45.899 --> 00:04:48.000 experience was fragmented. You'd buy a song, 00:04:48.120 --> 00:04:50.740 try to sync it to your Samsung device, and maybe 00:04:50.740 --> 00:04:52.740 the drivers were out of date. That's the drivers. 00:04:53.079 --> 00:04:55.139 Or maybe the firmware on the player didn't match 00:04:55.139 --> 00:04:57.879 the DRM version on your computer. It was clunky. 00:04:57.939 --> 00:05:00.699 It did not play for sure. It played, maybe. It 00:05:00.699 --> 00:05:02.519 played eventually if you reinstall the drivers. 00:05:02.939 --> 00:05:05.160 Meanwhile, Apple has the walled garden. They 00:05:05.160 --> 00:05:06.980 make the iPod. They make iTunes. They make the 00:05:06.980 --> 00:05:09.459 Fairplay DRM. It's a closed loop. You plug it 00:05:09.459 --> 00:05:11.540 in. It syncs. You walk away. It's simple. And 00:05:11.540 --> 00:05:13.639 Microsoft, being Microsoft, looks at the numbers 00:05:13.639 --> 00:05:16.339 and realizes, OK, our partners are incompetent. 00:05:16.339 --> 00:05:19.160 If we want to beat Apple, we can't rely on Samsung 00:05:19.160 --> 00:05:21.899 or Creative to design a cool gadget. We have 00:05:21.899 --> 00:05:24.310 to do it ourselves. This is a massive pivot for 00:05:24.310 --> 00:05:26.689 them. This is Microsoft saying, for one of the 00:05:26.689 --> 00:05:29.750 first times, we are going to become a hardware 00:05:29.750 --> 00:05:32.350 company. A consumer hardware company, which they 00:05:32.350 --> 00:05:34.750 had only successfully done once before. The Xbox. 00:05:35.050 --> 00:05:38.519 The Xbox. Right. That context is so important. 00:05:38.720 --> 00:05:42.300 The Xbox launched in 2001. And by 2006, the Xbox 00:05:42.300 --> 00:05:45.839 360 is a massive hit. It proved that Microsoft 00:05:45.839 --> 00:05:48.459 could make hardware that cool people actually 00:05:48.459 --> 00:05:50.740 wanted. That they could capture the living room. 00:05:50.819 --> 00:05:53.920 Exactly. So the executives in Redmond said, get 00:05:53.920 --> 00:05:56.620 us the Xbox guys. Do for music what you did for 00:05:56.620 --> 00:06:00.180 gaming. Enter Jay Allard. Jay Allard is a legend 00:06:00.180 --> 00:06:03.079 in Microsoft history. He was the visionary behind 00:06:03.079 --> 00:06:05.459 the Xbox. He was young. He was bald. He wore 00:06:05.459 --> 00:06:08.079 hoodies. He was the anti -Bill Gates in terms 00:06:08.079 --> 00:06:10.500 of image. He was the cool executive. He was their 00:06:10.500 --> 00:06:13.100 Steve Jobs in a way. In a way, yeah. They put 00:06:13.100 --> 00:06:15.839 him in charge of this new music project, codenamed 00:06:15.839 --> 00:06:18.959 Project Argo. Argo. I like that. It sounds adventurous. 00:06:19.160 --> 00:06:21.300 Like they're sailing into dangerous, dangerous 00:06:21.300 --> 00:06:24.579 waters. It was a serious initiative. They decided 00:06:24.579 --> 00:06:27.240 to kill Plays for Sure. They were going to burn 00:06:27.240 --> 00:06:30.079 their own partners. They told Creative and Samsung, 00:06:30.300 --> 00:06:32.000 sorry, we're competing with you now. Good luck. 00:06:32.910 --> 00:06:34.850 That must have gone over well. Oh, it was a bloodbath 00:06:34.850 --> 00:06:37.350 in the industry relationships. But Microsoft 00:06:37.350 --> 00:06:40.170 felt they had no choice. They needed to control 00:06:40.170 --> 00:06:44.110 the whole stack. The device, the software, the 00:06:44.110 --> 00:06:46.930 store. They were building an ecosystem, not just 00:06:46.930 --> 00:06:49.529 a gadget. They wanted to create an anti -iPod. 00:06:49.980 --> 00:06:51.819 But they didn't build the hardware entirely from 00:06:51.819 --> 00:06:53.720 scratch, did they? Because they were on a really 00:06:53.720 --> 00:06:55.740 tight timeline. I was reading in the notes about 00:06:55.740 --> 00:06:58.699 the Toshiba 1089. Right. So because they were 00:06:58.699 --> 00:07:00.839 in a rush to catch the holiday season of 2006, 00:07:01.279 --> 00:07:03.560 they couldn't engineer a device from the ground 00:07:03.560 --> 00:07:06.709 up in six months. That takes years. Impossible. 00:07:07.029 --> 00:07:08.949 So they partnered with Toshiba. There was an 00:07:08.949 --> 00:07:11.129 existing device called the Toshiba Gigabit S. 00:07:11.410 --> 00:07:14.329 The Gigabit. Another entry in the Hall of Fame 00:07:14.329 --> 00:07:17.709 of terrible MP3 player names. The MP3 era was 00:07:17.709 --> 00:07:20.790 a graveyard of bad names. It really was. But 00:07:20.790 --> 00:07:24.449 the Gigabit S was actually a decent device. Microsoft 00:07:24.449 --> 00:07:27.269 took the guts of the Gigabit, redesigned the 00:07:27.269 --> 00:07:30.089 shell, wrote entirely new software for it, and 00:07:30.089 --> 00:07:32.579 that became the first Zune. So it was a hybrid. 00:07:32.800 --> 00:07:35.819 It was. If you look at the FCC filings from 2006, 00:07:36.259 --> 00:07:39.899 the Zune is literally listed as the Toshiba 1089. 00:07:40.139 --> 00:07:43.040 So effectively, they took a Toshiba body, gave 00:07:43.040 --> 00:07:45.639 it a Microsoft brain, and painted it a very specific 00:07:45.639 --> 00:07:49.100 color. Which brings us to the launch. November 00:07:49.100 --> 00:07:51.800 2006 rolls around. They launched the Zune 30. 00:07:52.019 --> 00:07:55.399 The Zune 30, named for its 30 -gigabyte hard 00:07:55.399 --> 00:07:57.379 drive. A nice, straightforward name, at least. 00:07:57.560 --> 00:07:59.779 Let's talk about this device physically, because 00:07:59.779 --> 00:08:01.660 the specs were actually pretty competitive, weren't 00:08:01.660 --> 00:08:03.139 they? If you strip away the branding and just 00:08:03.139 --> 00:08:05.079 look at the sheet. They were better than competitive. 00:08:05.220 --> 00:08:07.360 In some ways, they were superior to the iPod 00:08:07.360 --> 00:08:09.459 Classic of the time. It had a larger screen, 00:08:09.600 --> 00:08:12.120 3 inches, compared to the iPod's 2 .5. Which 00:08:12.120 --> 00:08:15.189 was a big deal for video. A huge deal. And it 00:08:15.189 --> 00:08:17.769 had an FM radio, which people forget was a huge 00:08:17.769 --> 00:08:20.050 request back then. The iPod never had a radio. 00:08:20.209 --> 00:08:22.550 That was a big differentiator for commuters who 00:08:22.550 --> 00:08:24.670 wanted to listen to morning drive times or NPR. 00:08:25.069 --> 00:08:27.110 Apple always refused to add it because they thought 00:08:27.110 --> 00:08:30.089 it was old tech. Exactly. And the screen was 00:08:30.089 --> 00:08:32.850 landscape oriented, which made it better for 00:08:32.850 --> 00:08:35.250 video. Yeah. But none of that mattered because 00:08:35.250 --> 00:08:37.750 of the design choices. The aesthetic. The aesthetic. 00:08:38.190 --> 00:08:40.750 Microsoft used a manufacturing process called 00:08:40.750 --> 00:08:43.809 double shot injection molding. Basically, you 00:08:43.809 --> 00:08:46.490 have a layer of colored plastic and a layer of 00:08:46.490 --> 00:08:49.289 clear plastic over it. It gives it this depth, 00:08:49.370 --> 00:08:52.029 this premium feel. It sounds nice in theory. 00:08:52.289 --> 00:08:56.350 It is nice. If you hold a Zoom 30 today, it feels 00:08:56.350 --> 00:08:58.730 solid. It doesn't feel cheap. The color is deep 00:08:58.730 --> 00:09:01.970 inside the material. But the color choices, they 00:09:01.970 --> 00:09:04.129 launched with black, white, and brown. Why brown? 00:09:04.230 --> 00:09:06.049 I need to understand this. Who sat in a boardroom 00:09:06.049 --> 00:09:08.210 and said, you know what the kids want? The color 00:09:08.210 --> 00:09:11.470 of dirt. The color of mud. The logic was actually 00:09:11.470 --> 00:09:14.009 rooted. In high fashion, if you can believe it. 00:09:14.049 --> 00:09:16.129 I cannot. They were looking at luxury goods. 00:09:16.330 --> 00:09:19.029 Think about premium leather wallets, expensive 00:09:19.029 --> 00:09:21.690 belts, mahogany furniture, high -end luggage. 00:09:21.909 --> 00:09:23.950 They're trying to evoke a sense of warmth and 00:09:23.950 --> 00:09:27.129 organic texture. To contrast with Apple's sterile 00:09:27.129 --> 00:09:29.610 white. Precisely. They wanted it to feel like 00:09:29.610 --> 00:09:33.169 a crafted object. Apple is cold, clinical, sci 00:09:33.169 --> 00:09:37.850 -fi. We are warm, human, organic. But the execution 00:09:37.850 --> 00:09:41.129 didn't read as luxury leather. No. It read as... 00:09:41.389 --> 00:09:44.809 Well, poop. A turd. A brick of chocolate left 00:09:44.809 --> 00:09:47.809 in the sun. It was immediately mocked. The tech 00:09:47.809 --> 00:09:50.110 blogs, which were just gaining power at this 00:09:50.110 --> 00:09:53.269 time, sites like Engadget and Gizmodo, they tore 00:09:53.269 --> 00:09:55.950 it apart. They called it the brick. It looked 00:09:55.950 --> 00:09:58.110 clunky. It had hard angles. And that first impression 00:09:58.110 --> 00:09:59.990 matters so much. You're launching against the 00:09:59.990 --> 00:10:01.909 coolest product on the planet. You can't just 00:10:01.909 --> 00:10:04.710 be good. You have to be desirable. And brown 00:10:04.710 --> 00:10:07.870 is rarely the color of desire in consumer electronics. 00:10:08.269 --> 00:10:09.950 It's true. Even today, how many brown phones 00:10:09.950 --> 00:10:12.860 do you see? It's a risky color. And for a company 00:10:12.860 --> 00:10:15.419 like Microsoft, which was already seen as the 00:10:15.419 --> 00:10:18.440 uncool office productivity company, trying to 00:10:18.440 --> 00:10:20.419 pull off high fashion brown was a stretch. You 00:10:20.419 --> 00:10:22.139 just reinforce the idea that they didn't get 00:10:22.139 --> 00:10:24.539 it. But putting the color aside, the hardware 00:10:24.539 --> 00:10:27.899 didn't stay a brick forever. I feel like the 00:10:27.899 --> 00:10:29.620 Zoom 30 is the only one people remember because 00:10:29.620 --> 00:10:32.000 of the memes. But the evolution happened really 00:10:32.000 --> 00:10:34.960 fast. It did. The second generation arrived just 00:10:34.960 --> 00:10:38.049 a year later in 2007. Yeah. And this is where 00:10:38.049 --> 00:10:39.970 the hardware actually got really good. They introduced 00:10:39.970 --> 00:10:43.289 the Zune pad. This is the squircle. The squircle. 00:10:43.409 --> 00:10:47.149 A rounded square is a stroke of genius. Apple 00:10:47.149 --> 00:10:49.470 had the patent on the click wheel, which was, 00:10:49.570 --> 00:10:52.049 let's be honest, the greatest navigation tool 00:10:52.049 --> 00:10:54.409 ever invented for music. It was so satisfying, 00:10:54.669 --> 00:10:57.710 that circular scrolling motion. Microsoft couldn't 00:10:57.710 --> 00:10:59.950 use a wheel, so they made a touch -sensitive 00:10:59.950 --> 00:11:02.149 pad. You could flick your thumb up and down to 00:11:02.149 --> 00:11:04.429 scroll, like you do on a smartphone screen today. 00:11:04.809 --> 00:11:06.809 But you could also click the buttons physically. 00:11:07.279 --> 00:11:09.240 It was a hybrid. That's actually a really difficult 00:11:09.240 --> 00:11:11.940 engineering challenge, to mix capacitive touch 00:11:11.940 --> 00:11:15.059 with physical tactile feedback. It was. And it 00:11:15.059 --> 00:11:16.879 worked beautifully. It was fast. You could fly 00:11:16.879 --> 00:11:19.460 through lists of songs. They also expanded the 00:11:19.460 --> 00:11:21.779 line. They realized that hard drive players were 00:11:21.779 --> 00:11:24.139 heavy, so they launched the Zune 4 and Zune 8. 00:11:24.299 --> 00:11:27.559 A flash memory players? Right. Tiny credit card 00:11:27.559 --> 00:11:29.980 size to fight the iPod Nano. Yeah. And then... 00:11:30.250 --> 00:11:32.509 Bigger hard drive ones, the 80 and the 120. And 00:11:32.509 --> 00:11:33.889 this is where they started doing the customization 00:11:33.889 --> 00:11:37.429 stuff, right? Zune Originals. This was a great 00:11:37.429 --> 00:11:38.870 idea. You could go to their website and order 00:11:38.870 --> 00:11:42.289 a Zune with custom artwork laser edged onto the 00:11:42.289 --> 00:11:45.289 back. I remember seeing those. They hired legit 00:11:45.289 --> 00:11:48.909 artists to do these designs. Psychedelic patterns, 00:11:49.129 --> 00:11:52.309 abstract art tattoos. You could pick crazy color 00:11:52.309 --> 00:11:54.370 combinations. Which is something Apple never 00:11:54.370 --> 00:11:57.100 really did. Apple was very... You will take the 00:11:57.100 --> 00:11:59.259 white one or maybe the black one and you will 00:11:59.259 --> 00:12:02.440 like it. Apple was uniform. Zune was trying to 00:12:02.440 --> 00:12:05.360 be expressive. Music is personal. Your players 00:12:05.360 --> 00:12:08.100 should be too. It was a smart angle. It gave 00:12:08.100 --> 00:12:10.159 them a personality that wasn't just we are the 00:12:10.159 --> 00:12:12.379 other guys. But if we are talking about the hardware 00:12:12.379 --> 00:12:15.360 peak, the absolute Mona Lisa of the Zune lineup, 00:12:15.480 --> 00:12:19.500 we have to jump to 2009. The Zune HD. The Zune 00:12:19.500 --> 00:12:21.399 HD. It breaks my heart a little just talking 00:12:21.399 --> 00:12:24.490 about it. Why? Because it is a genuinely magnificent 00:12:24.490 --> 00:12:26.750 piece of machinery that nobody bought. It's like 00:12:26.750 --> 00:12:28.750 a great album that never charted. Paint the picture 00:12:28.750 --> 00:12:31.710 for us. 2009. What was this thing? Imagine a 00:12:31.710 --> 00:12:35.629 slab of glass and aluminum. Screws exposed. Industrial 00:12:35.629 --> 00:12:38.690 chic. It was smaller than an iPod Touch. And 00:12:38.690 --> 00:12:42.669 the screen... It was an OLED. Explain why OLED 00:12:42.669 --> 00:12:45.309 matters here. Because in 2009, most screens were 00:12:45.309 --> 00:12:47.549 LCD, right? Everything was LCD. Yeah. Well, the 00:12:47.549 --> 00:12:49.830 T -screens have a backlight. Even when the screen 00:12:49.830 --> 00:12:51.950 is showing black, the light is on, so it's actually 00:12:51.950 --> 00:12:55.450 a dark gray. OLED organic light emitting diode 00:12:55.450 --> 00:12:57.730 emits its own light. Each pixel makes its own 00:12:57.730 --> 00:12:59.710 light. Exactly. So when a pixel is black, it 00:12:59.710 --> 00:13:03.529 is off. It is perfectly inky black. So the contrast 00:13:03.529 --> 00:13:06.230 is infinite. The colors popped in a way that 00:13:06.230 --> 00:13:08.919 nothing else on the market did. The iPhone didn't 00:13:08.919 --> 00:13:11.059 get an OLED screen until the iPhone X, nearly 00:13:11.059 --> 00:13:14.019 a decade later. A full decade. The Zune HD had 00:13:14.019 --> 00:13:16.600 it in 2009. That is wild. They were 10 years 00:13:16.600 --> 00:13:19.740 ahead on the screen tech. Inside, it had an NVIDIA 00:13:19.740 --> 00:13:22.419 Tegra chip. This was a powerhouse processor usually 00:13:22.419 --> 00:13:25.399 used for much bigger devices. It could play 720p 00:13:25.399 --> 00:13:28.700 HD video out to a TV via a dock. It had an HD 00:13:28.700 --> 00:13:30.919 radio receiver built in. It was arguably the 00:13:30.919 --> 00:13:32.639 most advanced portable media player ever made. 00:13:32.779 --> 00:13:34.620 And the reviews back this up. This wasn't just 00:13:34.620 --> 00:13:37.990 Microsoft hype. Overwhelmingly. Farhad Manjoo, 00:13:38.129 --> 00:13:41.009 who is not an easy critic to please, wrote in 00:13:41.009 --> 00:13:44.610 Slate that if you bought a Zune HD over an iPod 00:13:44.610 --> 00:13:46.230 Touch, you wouldn't have regretted it. That's 00:13:46.230 --> 00:13:49.230 high praise. TechRadar, CNET, they all praised 00:13:49.230 --> 00:13:51.470 the hardware. They said it felt better in the 00:13:51.470 --> 00:13:54.370 hand than the iPod. The build quality was exceptional. 00:13:54.950 --> 00:13:57.529 So we have a device that is objectively great. 00:13:57.669 --> 00:14:00.389 Superior screen, great build quality, snappy 00:14:00.389 --> 00:14:03.779 performance. Why didn't it work? Why didn't everyone 00:14:03.779 --> 00:14:06.039 throw away their iPods? Well, that leads us to 00:14:06.039 --> 00:14:08.080 the philosophy. You can have the best hardware 00:14:08.080 --> 00:14:10.299 in the world, but if your story doesn't resonate, 00:14:10.480 --> 00:14:12.899 you're dead. And Microsoft was trying to tell 00:14:12.899 --> 00:14:15.620 a very specific story with the Zoom. Welcome 00:14:15.620 --> 00:14:18.039 to the social. That was the tagline. Which, again, 00:14:18.080 --> 00:14:19.840 feels like a misread of the room. When I think 00:14:19.840 --> 00:14:22.240 of MP3 players, especially back then, I think 00:14:22.240 --> 00:14:24.720 of headphones on, world off. I'm on the subway. 00:14:24.779 --> 00:14:26.620 I don't want to talk to people. You want to be 00:14:26.620 --> 00:14:29.159 in your own bubble. Right. That was Apple's marketing 00:14:29.159 --> 00:14:32.860 genius. The silhouette adds. A person dancing 00:14:32.860 --> 00:14:36.179 alone against a bright background. Pure individualism. 00:14:36.399 --> 00:14:39.399 You are the star of your own music video. A private 00:14:39.399 --> 00:14:42.240 concert. Microsoft tried to zig where Apple zagged. 00:14:42.240 --> 00:14:44.940 They said, no, music is a communal experience. 00:14:45.440 --> 00:14:48.740 Music is how we bond. Music is for sharing. And 00:14:48.740 --> 00:14:51.860 they built a feature to force this bonding. The 00:14:51.860 --> 00:14:55.379 infamous Wi -Fi sharing. Codenamed. And I'm sorry 00:14:55.379 --> 00:14:58.120 I have to say this. Squirt. Grown, stop. Let 00:14:58.120 --> 00:15:00.919 me squirt you this song. Who approved that? Was 00:15:00.919 --> 00:15:03.259 there no adult in the room? It was an internal 00:15:03.259 --> 00:15:05.879 engineering term, like squirting data across 00:15:05.879 --> 00:15:08.559 a wire, that somehow leaked out into the public 00:15:08.559 --> 00:15:10.620 consciousness, though they officially called 00:15:10.620 --> 00:15:13.620 it Zune -to -Zune sharing. Thank goodness. But 00:15:13.620 --> 00:15:15.639 the concept was actually revolutionary. How did 00:15:15.639 --> 00:15:18.840 it work? The Zune had Wi -Fi. The iPod didn't. 00:15:19.000 --> 00:15:21.299 If you and I were standing at a bus stop and 00:15:21.299 --> 00:15:23.700 I was listening to a great new track, I could 00:15:23.700 --> 00:15:26.639 press a button. Find your Zune wirelessly and 00:15:26.639 --> 00:15:28.559 beam the song to you. That sounds like magic. 00:15:28.940 --> 00:15:30.759 Today we have AirDrop, but that's mostly for 00:15:30.759 --> 00:15:33.100 photos or links. Sharing a song file instantly. 00:15:33.259 --> 00:15:36.000 That's the dream. It is the dream. Imagine discovering 00:15:36.000 --> 00:15:38.379 a band and spreading it virally through a crowd 00:15:38.379 --> 00:15:41.580 at a festival. But then, the lawyers got involved. 00:15:41.759 --> 00:15:44.559 Record labels? Of course. The record labels were 00:15:44.559 --> 00:15:47.220 terrified. They looked at this feature and saw 00:15:47.220 --> 00:15:50.799 Napster in a pocket. They thought if people can 00:15:50.799 --> 00:15:53.120 share songs, nobody will ever buy them again. 00:15:53.259 --> 00:15:55.740 So they forced Microsoft to cripple the feature. 00:15:56.639 --> 00:15:59.419 This is the three plays rule. Three plays or 00:15:59.419 --> 00:16:01.960 three days. If I sent you a song, you couldn't 00:16:01.960 --> 00:16:04.179 keep it. You would sit in your inbox. You could 00:16:04.179 --> 00:16:06.240 listen to it three times or keep it for three 00:16:06.240 --> 00:16:10.279 days, whichever came first. After that, poof. 00:16:11.269 --> 00:16:14.590 Gone. That is so frustrating. It takes a magical 00:16:14.590 --> 00:16:16.950 moment. Here's a gift. I love this song and turns 00:16:16.950 --> 00:16:19.250 it into a chore. Hurry up and listen to this 00:16:19.250 --> 00:16:21.710 before it explodes. It destroyed the value proposition. 00:16:21.970 --> 00:16:24.350 It felt stingy. It felt like a trial version, 00:16:24.590 --> 00:16:26.850 not a social connection. And here's the other 00:16:26.850 --> 00:16:29.669 problem. Network effects. Right. For Zoom to 00:16:29.669 --> 00:16:32.049 Zoom sharing to work, you need another person 00:16:32.049 --> 00:16:34.129 with a Zoom. Exactly. And because Zoom market 00:16:34.129 --> 00:16:36.730 share was so low. the odds of you actually meeting 00:16:36.730 --> 00:16:39.230 another person with a Zune in the wild were statistically 00:16:39.230 --> 00:16:41.570 insignificant. So you had this social feature 00:16:41.570 --> 00:16:43.470 that you could never use because you were the 00:16:43.470 --> 00:16:45.370 only guy at the party with the brown brick. It 00:16:45.370 --> 00:16:47.629 was a lonely social network. Ideally, they should 00:16:47.629 --> 00:16:50.190 have fought the labels harder. But I guess in 00:16:50.190 --> 00:16:53.830 2006, the labels still held all the cards. Streaming 00:16:53.830 --> 00:16:56.330 hadn't broken their power yet. They did. But 00:16:56.330 --> 00:16:57.970 there was another part of the service that Microsoft 00:16:57.970 --> 00:17:00.850 got right. And this is the part that really hurts 00:17:00.850 --> 00:17:03.450 to look back on. The Zune Pass. The Zune Pass. 00:17:03.830 --> 00:17:06.170 Okay, let's unpack this. Because when I read 00:17:06.170 --> 00:17:08.710 about this, I realized I'm basically paying for 00:17:08.710 --> 00:17:11.109 Zune Pass today, just under a different name. 00:17:11.269 --> 00:17:14.849 You are. We all are. In 2006, the dominant model 00:17:14.849 --> 00:17:18.750 was iTunes. You pay 99 cents. You get one song. 00:17:18.829 --> 00:17:21.470 It's a digital record store a la carte. You own 00:17:21.470 --> 00:17:23.650 the file. Ownership was king. That was the whole 00:17:23.650 --> 00:17:25.869 idea. Ownership was king. Microsoft looked at 00:17:25.869 --> 00:17:29.430 the future and said, subscription. For $14 .99 00:17:29.430 --> 00:17:32.289 a month, you got the Zune Pass. Unlimited downloads. 00:17:32.430 --> 00:17:34.170 You could download the entire catalog if you 00:17:34.170 --> 00:17:37.269 had the hard drive space. So it was Spotify before 00:17:37.269 --> 00:17:40.529 Spotify. It was Spotify, but downloadable. You 00:17:40.529 --> 00:17:42.650 didn't need a constant internet connection. You 00:17:42.650 --> 00:17:44.730 synced the songs, and as long as you kept paying 00:17:44.730 --> 00:17:47.690 the monthly fee, they worked. But $15 a month 00:17:47.690 --> 00:17:50.190 felt expensive back then. People were used to 00:17:50.190 --> 00:17:53.339 buying one album a month for $10. It did. which 00:17:53.339 --> 00:17:56.240 is why Microsoft added the Keep incentive. This 00:17:56.240 --> 00:17:58.880 was the best deal in the history of digital music, 00:17:58.980 --> 00:18:01.559 bar none. I still can't believe they offered 00:18:01.559 --> 00:18:05.000 this. The 10 tracks rule. Yes. Every month, on 00:18:05.000 --> 00:18:06.980 top of the unlimited listening, you could pick 00:18:06.980 --> 00:18:10.259 10 songs to download and keep forever, DRM -free. 00:18:10.339 --> 00:18:13.000 Even if you cancel the subscription, those 10 00:18:13.000 --> 00:18:16.329 songs were yours. So let's do the math. 10 songs 00:18:16.329 --> 00:18:19.910 on iTunes costs $10. The subscription is $15. 00:18:19.930 --> 00:18:22.890 So you are basically paying $5 a month for unlimited 00:18:22.890 --> 00:18:25.269 access to all the music in the world. Correct. 00:18:25.450 --> 00:18:27.430 It was practically free streaming. It was an 00:18:27.430 --> 00:18:30.750 incredible value. But consumers just couldn't 00:18:30.750 --> 00:18:32.289 wrap their heads around it. We weren't ready. 00:18:32.509 --> 00:18:34.430 We weren't ready to stop owning our music. People 00:18:34.430 --> 00:18:37.250 looked at the $15 fee and said, but I don't own 00:18:37.250 --> 00:18:39.690 anything at the end of the month. The concept 00:18:39.690 --> 00:18:41.950 of access over ownership hadn't clicked yet. 00:18:42.049 --> 00:18:44.869 It's the curse of being too early. You look wrong, 00:18:45.009 --> 00:18:47.970 even if you're right. And Microsoft was terrible 00:18:47.970 --> 00:18:50.690 at explaining it. Their ads were weird and abstract. 00:18:50.990 --> 00:18:52.670 They should have just put up a billboard that 00:18:52.670 --> 00:18:56.269 said Spotify for $5. But Spotify didn't exist, 00:18:56.349 --> 00:18:58.210 so they couldn't make the comparison. They were 00:18:58.210 --> 00:19:00.309 describing a color to people who had only ever 00:19:00.309 --> 00:19:02.789 seen black and white. Perfectly put. So they 00:19:02.789 --> 00:19:04.890 have the tech Wi -Fi sharing. They have the business 00:19:04.890 --> 00:19:07.849 model subscriptions. But they can't sell it. 00:19:08.130 --> 00:19:12.170 And then the glitches start. We can't do a deep 00:19:12.170 --> 00:19:14.130 dive on the Zune without talking about the Great 00:19:14.130 --> 00:19:17.130 Leap Year meltdown. The Zune 30 freeze, New Year's 00:19:17.130 --> 00:19:20.069 Eve 2008. The story is incredible. It's like 00:19:20.069 --> 00:19:22.609 Y2K, but it actually happened, and only to people 00:19:22.609 --> 00:19:25.410 with brown bricks. It's at the scene. It's December 00:19:25.410 --> 00:19:28.250 31st, 2008. People are getting ready for parties. 00:19:28.490 --> 00:19:30.589 They plug in their Zunes to load up a playlist 00:19:30.589 --> 00:19:33.750 for the night, and the screen freezes. Just freezes. 00:19:33.930 --> 00:19:36.130 It gets stuck on the loading bar. You reset it, 00:19:36.150 --> 00:19:38.430 it freezes again. You hard reboot, it freezes 00:19:38.430 --> 00:19:40.890 again. And it's not just a few people. It is 00:19:40.890 --> 00:19:44.990 every single first -generation Zune 30 on the 00:19:44.990 --> 00:19:47.930 planet simultaneously. That must have been terrifying. 00:19:47.930 --> 00:19:50.549 Did people think it was a virus? A kill switch? 00:19:50.890 --> 00:19:54.109 The forums were on fire. People thought Microsoft 00:19:54.109 --> 00:19:56.109 had bricked the devices remotely to force them 00:19:56.109 --> 00:19:59.529 to buy the new Zune. Panic. Conspiracy theories. 00:19:59.789 --> 00:20:02.869 But the reality was much, much dumber. It was 00:20:02.869 --> 00:20:05.670 a driver bug. Specifically, the internal clock 00:20:05.670 --> 00:20:08.069 driver. It was a piece of code written by a component 00:20:08.069 --> 00:20:10.960 supplier called Freescale. The code's job was 00:20:10.960 --> 00:20:13.119 to calculate what day of the year it was. In 00:20:13.119 --> 00:20:17.500 2008 was a leap year, 366 days. Exactly. The 00:20:17.500 --> 00:20:20.119 code had a logic loop. It said essentially, if 00:20:20.119 --> 00:20:23.559 days is greater than 365, subtract 365 and add 00:20:23.559 --> 00:20:26.559 one to the year. But the way it was written on 00:20:26.559 --> 00:20:30.670 the 366th day. It entered an infinite loop. Oh, 00:20:30.670 --> 00:20:33.490 no. It kept asking, is it day 366? And the answer 00:20:33.490 --> 00:20:36.069 was yes. So it just spun in circles, burning 00:20:36.069 --> 00:20:38.150 the processor. The device wasn't broken. It was 00:20:38.150 --> 00:20:40.049 just thinking really, really hard about what 00:20:40.049 --> 00:20:42.049 day it was. It was an existential crisis for 00:20:42.049 --> 00:20:45.029 the microchip. What day is it? It can't be today. 00:20:45.130 --> 00:20:47.309 Try again. What day is it? So what was the fix? 00:20:47.430 --> 00:20:49.650 Did they have to issue a patch? They couldn't 00:20:49.650 --> 00:20:51.849 patch it because the devices wouldn't boot. Microsoft 00:20:51.849 --> 00:20:54.049 engineers scrambled, found the bug in the source 00:20:54.049 --> 00:20:57.069 code, and then realized the solution was... to 00:20:57.069 --> 00:20:59.549 do nothing. Microsoft's official advice was, 00:20:59.670 --> 00:21:02.190 wait. You had to let the battery drain completely 00:21:02.190 --> 00:21:05.269 so the internal clock would stop. Then, wait 00:21:05.269 --> 00:21:09.049 until noon GMT on January 1st, 2009. Why noon? 00:21:09.630 --> 00:21:11.250 So that the entire world was safely into the 00:21:11.250 --> 00:21:13.710 new day. Once the calendar rolled over naturally 00:21:13.710 --> 00:21:16.210 to a non -leap year day, the math worked again. 00:21:16.369 --> 00:21:18.650 You recharged it, turned it on, and it was fine. 00:21:18.910 --> 00:21:21.990 That is humiliating. It was the final nail in 00:21:21.990 --> 00:21:24.569 the coffin for the brand's reputation. Here's 00:21:24.569 --> 00:21:26.789 this device that is already the butt of jokes, 00:21:26.950 --> 00:21:29.069 and now it can't even tell time on New Year's 00:21:29.069 --> 00:21:31.190 Eve. It just reinforced the narrative. Apple 00:21:31.190 --> 00:21:34.849 is polish, Microsoft is buggy, Apple works, Zoom 00:21:34.849 --> 00:21:37.529 crashes. It became a joke on late night TV. The 00:21:37.529 --> 00:21:40.009 Zoom is hungover. And the marketing didn't help. 00:21:40.069 --> 00:21:42.250 I remember seeing a website called ComingZoon. 00:21:42.250 --> 00:21:45.829 Oh, God. ComingZoon. Spelled C -O -M -I -N -G 00:21:45.829 --> 00:21:49.599 -Z -U -N -E. Yeah. It was this weird, artsy, 00:21:49.599 --> 00:21:51.759 viral marketing campaign. They tried to create 00:21:51.759 --> 00:21:54.200 a grassroots movement. They hired Zoonmasters. 00:21:54.559 --> 00:21:56.500 Zoonmasters? What is a Zoonmaster? College campus 00:21:56.500 --> 00:21:58.880 reps. They would walk around with Zoons, trying 00:21:58.880 --> 00:22:01.339 to act cool, handing out stickers, hosting parties. 00:22:01.460 --> 00:22:04.019 But it felt so forced. It felt like a corporation 00:22:04.019 --> 00:22:06.940 wearing a backwards baseball cap saying, how 00:22:06.940 --> 00:22:09.220 do you do, fellow kids? Authentic cool cannot 00:22:09.220 --> 00:22:12.420 be manufactured. You can't buy cool with a marketing 00:22:12.420 --> 00:22:15.789 budget. And the retailers smelled blood. By 2008, 00:22:16.329 --> 00:22:18.269 GameStop announced they were pulling Zunes from 00:22:18.269 --> 00:22:21.009 their shelves. That's a bad sign. When the video 00:22:21.009 --> 00:22:23.309 game store, which is arguably your core demographic, 00:22:23.730 --> 00:22:26.809 Xbox Gamers, says, we don't want this, you are 00:22:26.809 --> 00:22:29.069 in trouble. They cited insufficient demand. The 00:22:29.069 --> 00:22:30.890 numbers were brutal. Give us the scorecard. How 00:22:30.890 --> 00:22:33.950 bad did it get? Launch week in 2006, they managed 00:22:33.950 --> 00:22:38.009 a 9 % unit share. Not terrible, but mostly powered 00:22:38.009 --> 00:22:40.609 by initial curiosity and Microsoft loyalists. 00:22:40.769 --> 00:22:43.440 Okay, a toehold. A toehold. But it never grew. 00:22:43.559 --> 00:22:46.240 At its absolute peak, they maybe hit 10 or 11 00:22:46.240 --> 00:22:48.380 percent of the hard drive player market. But 00:22:48.380 --> 00:22:51.859 then the slide began. By 2009, the year of the 00:22:51.859 --> 00:22:54.380 magnificent Zune HD market share in the U .S. 00:22:54.400 --> 00:22:57.240 had fallen to 2 percent. 2 percent. That is a 00:22:57.240 --> 00:23:01.140 rounding error. Meanwhile, Apple held 73 percent. 00:23:02.400 --> 00:23:05.079 SanDisk, the budget option, was beating Microsoft. 00:23:05.700 --> 00:23:09.259 Creative was beating them. In early 2009, Microsoft 00:23:09.259 --> 00:23:13.160 reported a $100 million drop in sales revenue 00:23:13.160 --> 00:23:15.980 from the previous year. It was a money pit. But 00:23:15.980 --> 00:23:18.299 we have to zoom out here. Because even if the 00:23:18.299 --> 00:23:20.640 Zoom was perfect, even if it was gold -plated 00:23:20.640 --> 00:23:23.079 and made you coffee, it was doomed, wasn't it? 00:23:23.140 --> 00:23:26.099 This is the tragedy. Microsoft was fighting a 00:23:26.099 --> 00:23:28.640 war for a territory that was sinking into the 00:23:28.640 --> 00:23:32.200 ocean. The smartphone. January 2007. Just two 00:23:32.200 --> 00:23:34.720 months after the Zoom launches, Steve Jobs walks 00:23:34.720 --> 00:23:37.779 on stage and introduces the iPhone. He calls 00:23:37.779 --> 00:23:40.940 it a widescreen iPod with touch controls, a revolutionary 00:23:40.940 --> 00:23:43.740 mobile phone, and a breakthrough internet communicator. 00:23:43.859 --> 00:23:46.279 The widescreen iPod part is the key. The moment 00:23:46.279 --> 00:23:48.579 the iPhone existed, the standalone MP3 player 00:23:48.579 --> 00:23:51.420 was deadwalking. Why carry a phone in a Zoom 00:23:51.420 --> 00:23:53.920 when your phone is an iPod? So Zoom was fighting 00:23:53.920 --> 00:23:56.319 for the scraps of a dying industry. Microsoft 00:23:56.319 --> 00:23:58.680 was obsessing over how to beat the iPod classic, 00:23:58.839 --> 00:24:01.279 while Apple was busy making the iPod irrelevant. 00:24:01.920 --> 00:24:04.039 It's a classic case of what Simon Sinek calls 00:24:04.039 --> 00:24:07.009 the infinite game. Explain that concept. Cynic 00:24:07.009 --> 00:24:09.450 argues that there are finite games and infinite 00:24:09.450 --> 00:24:13.609 games. A finite game has rules, a beginning and 00:24:13.609 --> 00:24:17.670 an end. The goal is to win. Football is a finite 00:24:17.670 --> 00:24:20.569 game. Microsoft was playing a finite game. Beat 00:24:20.569 --> 00:24:22.849 the iPod. Right. They looked at Apple specs and 00:24:22.849 --> 00:24:25.170 tried to top them. They have 30 jibby. We have 00:24:25.170 --> 00:24:27.410 30 jibby. They have a screen. Ours is bigger. 00:24:27.529 --> 00:24:29.430 But Apple was playing the infinite game. Right. 00:24:29.509 --> 00:24:32.200 The infinite game has no finish line. The goal 00:24:32.200 --> 00:24:34.940 is to stay in the game and evolve. Apple wasn't 00:24:34.940 --> 00:24:37.640 trying to beat Microsoft's MP3 player. They were 00:24:37.640 --> 00:24:40.240 trying to reinvent how humans interact with information. 00:24:40.579 --> 00:24:42.759 They cannibalized their own product. They cannibalized 00:24:42.759 --> 00:24:45.920 their own golden goose, the iPod, to create the 00:24:45.920 --> 00:24:48.240 iPhone. Microsoft wasn't willing to do that yet. 00:24:48.359 --> 00:24:50.680 They were protecting the Zune while Apple was 00:24:50.680 --> 00:24:53.339 killing the iPod to birth the iPhone. Exactly. 00:24:53.680 --> 00:24:56.359 Sinek calls the Zune a triumph of design but 00:24:56.359 --> 00:24:59.359 a failure of strategic thinking. They built the 00:24:59.359 --> 00:25:02.099 best buggy whip right as the Model T rolled off 00:25:02.099 --> 00:25:04.559 the assembly line. So the end comes. When did 00:25:04.559 --> 00:25:07.019 they finally pull the plug? It was a slow, painful 00:25:07.019 --> 00:25:10.660 fade. March 2011, they announced no new hardware 00:25:10.660 --> 00:25:13.500 would be developed. October 2011, officially. 00:25:14.480 --> 00:25:18.019 And finally in 2015, the Zune music service was 00:25:18.019 --> 00:25:21.059 shut down and users were migrated to Groove Music. 00:25:21.279 --> 00:25:23.299 Which nobody used either. Which was also eventually 00:25:23.299 --> 00:25:26.839 killed. RIP Zune. But wait, we can't end on the 00:25:26.839 --> 00:25:29.220 RIP. Because this is where the story gets really 00:25:29.220 --> 00:25:32.000 interesting. This is the legacy part of our deep 00:25:32.000 --> 00:25:34.779 dive. The slate theory. The flop that saved Microsoft. 00:25:35.099 --> 00:25:37.359 It sounds counterintuitive, doesn't it? How does 00:25:37.359 --> 00:25:39.460 a financial disaster save a company? You have 00:25:39.460 --> 00:25:42.119 to look at what Windows was in 2006. Windows 00:25:42.119 --> 00:25:45.980 XP. Windows Vista. It was gray. It was cluttered. 00:25:45.980 --> 00:25:48.000 It was a spreadsheet. It was designed by engineers 00:25:48.000 --> 00:25:51.400 for engineers. Bevels, shadows, drop -down menus, 00:25:51.599 --> 00:25:53.940 inside drop -down menus. There was no joy in 00:25:53.940 --> 00:25:56.039 it. It was work. Then look at the Zune HD interface. 00:25:56.240 --> 00:25:58.880 It didn't use icons. It used typography. Big, 00:25:58.880 --> 00:26:02.960 bold words. Music, videos, social. The words 00:26:02.960 --> 00:26:04.599 were the navigation. You swiped through them. 00:26:04.660 --> 00:26:06.359 It was fluid. It was animated. It felt alive. 00:26:06.660 --> 00:26:08.779 The content was the hero. This was the birth 00:26:08.779 --> 00:26:12.279 of the Metro design language. Yes. They used 00:26:12.279 --> 00:26:14.799 a font called Segoe, which Microsoft still uses 00:26:14.799 --> 00:26:18.240 today. They prioritized content over Chrome, 00:26:18.440 --> 00:26:20.880 meaning the borders and buttons. They realized 00:26:20.880 --> 00:26:23.019 that the interface should recede and the content 00:26:23.019 --> 00:26:24.720 should come forward. And they took this little 00:26:24.720 --> 00:26:26.960 design experiment from the failed music player 00:26:26.960 --> 00:26:29.319 and they injected it into the main bloodstream 00:26:29.319 --> 00:26:32.519 of Microsoft. It became the interface for Windows 00:26:32.519 --> 00:26:35.380 Phone 7. It became the dashboard for the Xbox 00:26:35.380 --> 00:26:38.630 360. And eventually it evolved into the tile 00:26:38.630 --> 00:26:41.289 interface of Windows 8. The live tiles. Even 00:26:41.289 --> 00:26:43.170 today, if you open the start menu in Windows 00:26:43.170 --> 00:26:46.529 10 or 11, that clean, flat design, the reliance 00:26:46.529 --> 00:26:49.309 on typography, the lack of fake 3D effects, that 00:26:49.309 --> 00:26:51.690 can all trace its lineage directly back to the 00:26:51.690 --> 00:26:54.910 Zoom team. So in a way, the Zoom died so that 00:26:54.910 --> 00:26:57.289 Microsoft could learn how to design. It taught 00:26:57.289 --> 00:26:59.750 them that user experience matters, that you can't 00:26:59.750 --> 00:27:02.069 just throw features at a user. You have to curate 00:27:02.069 --> 00:27:04.730 an experience. Before Zoom, Microsoft was an 00:27:04.730 --> 00:27:06.930 engineering company. Zune forced them to become 00:27:06.930 --> 00:27:08.609 a design company, at least in their consumer 00:27:08.609 --> 00:27:11.109 products. It humanized them. There's also this 00:27:11.109 --> 00:27:13.250 funny little lingering ghost of the Zune that 00:27:13.250 --> 00:27:16.630 I absolutely love. It involves airplanes. United 00:27:16.630 --> 00:27:19.849 Airlines. This is a great trivia nugget. Tell 00:27:19.849 --> 00:27:22.250 the listeners about this, because this proves 00:27:22.250 --> 00:27:25.309 the brand had a weirdly long half -life. So, 00:27:25.349 --> 00:27:27.529 United Airlines had a partnership with Microsoft 00:27:27.529 --> 00:27:31.049 to provide the audio for their Inflate Entertainment 00:27:31.049 --> 00:27:33.710 systems. You know, the little jack in the armrest 00:27:33.710 --> 00:27:35.509 where you plug in the plastic headphones? The 00:27:35.509 --> 00:27:37.670 one that always sounds staticky and plays a loop 00:27:37.670 --> 00:27:41.630 of classical music. That's the one. Well, long 00:27:41.630 --> 00:27:44.289 after the Zune hardware was discontinued, United 00:27:44.289 --> 00:27:48.079 kept using the branding. So in 2010, 2011, even 00:27:48.079 --> 00:27:50.740 2012, if you were flying to Denver or Chicago, 00:27:51.119 --> 00:27:54.039 you were listening to Zune contemporary pop or 00:27:54.039 --> 00:27:57.420 Zune piano jazz. That is fantastic. A zombie 00:27:57.420 --> 00:28:00.180 brand cruising at 30 ,000 feet. While the devices 00:28:00.180 --> 00:28:02.559 were gathering dust in pawn shops, the brand 00:28:02.559 --> 00:28:04.900 was flying high. It just shows how deep the corporate 00:28:04.900 --> 00:28:07.160 deals went. And the software lived on, too, right? 00:28:07.279 --> 00:28:09.859 The Zune desktop software, which, frankly, was 00:28:09.859 --> 00:28:12.500 much better than iTunes on Windows, became the 00:28:12.500 --> 00:28:15.420 sync tool for Windows Phone. If you bought an 00:28:15.420 --> 00:28:17.319 early Windows phone, you had to use Zune software 00:28:17.319 --> 00:28:20.359 to manage it. I remember that. So for a few years, 00:28:20.500 --> 00:28:23.259 Zune was the gateway to Microsoft's mobile strategy. 00:28:23.559 --> 00:28:25.359 So it really was the bridge. It was the bridge 00:28:25.359 --> 00:28:28.680 from old Microsoft to modern Microsoft. It was 00:28:28.680 --> 00:28:30.640 the necessary failure. Sometimes you have to 00:28:30.640 --> 00:28:33.240 fall on your face to learn how to run. Jay Allard 00:28:33.240 --> 00:28:35.980 and his team taught Microsoft that they could 00:28:35.980 --> 00:28:38.220 make something beautiful, even if they couldn't 00:28:38.220 --> 00:28:40.859 sell it. So as we wrap this up, I want to pose 00:28:40.859 --> 00:28:43.410 a what -if scenario. Because we talked about 00:28:43.410 --> 00:28:46.589 the Zune Pass, the subscription model. Microsoft 00:28:46.589 --> 00:28:49.069 had the rights. They had the catalog. They had 00:28:49.069 --> 00:28:51.309 the streaming tech. They had it all. But they 00:28:51.309 --> 00:28:53.750 locked it to the Zune hardware. You had to buy 00:28:53.750 --> 00:28:55.809 the brown brick to get the service. Correct. 00:28:55.890 --> 00:28:59.009 That was their fatal error. Imagine if in 2008 00:28:59.009 --> 00:29:02.470 or 2009, Microsoft had said, you know what? We 00:29:02.470 --> 00:29:03.970 aren't going to beat the iPhone with hardware. 00:29:04.130 --> 00:29:07.109 Let's put the Zune Pass app on the iPhone. That 00:29:07.109 --> 00:29:09.309 is the multi -billion dollar question. If they 00:29:09.309 --> 00:29:11.829 had launched a cross -platform music subscription 00:29:11.829 --> 00:29:15.009 service four years before Spotify launched in 00:29:15.009 --> 00:29:17.809 the U .S., would we be using Zune instead of 00:29:17.809 --> 00:29:20.069 Spotify today? It is very, very possible. They 00:29:20.069 --> 00:29:21.670 had the infrastructure. They had the Head Start. 00:29:21.849 --> 00:29:24.869 They had the artist relationships. But they were 00:29:24.869 --> 00:29:27.230 blinded by the hardware envy. They wanted a cool 00:29:27.230 --> 00:29:30.069 gadget. They wanted to be Apple so bad that they 00:29:30.069 --> 00:29:32.430 forgot they were Microsoft, a software company. 00:29:32.509 --> 00:29:35.150 They missed the forest for the trees. Or the 00:29:35.150 --> 00:29:38.930 cloud for the brick. They insisted on selling 00:29:38.930 --> 00:29:40.789 the box when they should have been selling the 00:29:40.789 --> 00:29:43.250 service. If they had pivoted to services just 00:29:43.250 --> 00:29:46.269 a few years earlier, Zune could be the biggest 00:29:46.269 --> 00:29:48.569 music platform in the world right now. And that, 00:29:48.569 --> 00:29:51.650 my friends, is the tragedy of the Zune. A brilliant 00:29:51.650 --> 00:29:55.410 service trapped inside a misunderstood... occasionally 00:29:55.410 --> 00:29:58.269 frozen box. A box that was ahead of its time 00:29:58.269 --> 00:30:00.430 but just couldn't tell the time. Exactly. So 00:30:00.430 --> 00:30:02.630 the next time you see that punchline on TV or 00:30:02.630 --> 00:30:05.210 you see a picture of a Zune, don't just laugh. 00:30:05.369 --> 00:30:07.630 Pour one out for the squircle. It deserves a 00:30:07.630 --> 00:30:10.289 little respect. It really does. Thanks for taking 00:30:10.289 --> 00:30:12.190 this deep dive with us. It's been a trip down 00:30:12.190 --> 00:30:14.509 memory lane. A brown, double -shot injection, 00:30:14.890 --> 00:30:18.069 molded memory lane. The best kind. Thanks for 00:30:18.069 --> 00:30:19.670 listening, everyone. We'll catch you on the next 00:30:19.670 --> 00:30:20.109 deep dive.