Bill Gates and Justin Timberlake got together at the Consumer Electronics Show (CES) in Las Vegas to announce Microsoft's new music service, Urge, in partnership with MTV. Gates is taking direct aim at Apple's iTunes — and it's near monopoly on the online music business. Microsoft is also planning on bringing TV into the mix, partnering with DirectTV in the US and BSkyB in England.
"We've talked about this as the decade of digital lifestyle, work style," Gates said. "What that means is all these tools become mainstream. Software will come in and make things both simpler and more effective. Not having to think about disks, entertainment, having a digital jukebox anywhere in the house so you can call up the movies you want and see anything you want to."
Microsoft has also been paying attention to Napster and Yahoo! Music. Urge will give users the choice to either purchase their music outright (as in iTunes) or "rent" the music by paying a subscription fee for an "all you can listen to" format similar to Yahoo! music.
It's doubtful that Gates is worrying too much about Napster or Yahoo, though. He's targeting Apple. That much is clear when you read that "[Urge's] offering will include exclusive material from MTV, though it will not be compatible with iPods ..." And unless Microsoft is planning on releasing a portable MP3 player in the near future (maybe an announcement at CES?), that is going to cause Urge some problems. How many of the thousands of iPod owners Gates is trying to draw away from iTunes are going to want to buy a new MP3 player to be able to take full advantage of the new service?
The launch of Urge will provide some needed competition in the market, but Gates and Microsoft need to recognize that the iPod is what the majority of people listen to music on, and fix the compatibility issue. Otherwise, Urge will end up being an also-ran.