Xbox Music Adds Freemium Option, Expands to iOS, Android As App

By Alex Pham, Los Angeles

 Xbox Music is breaking out of the Microsoft box.

The on-demand music service will be available as apps on Apple's iOS and Google's Android devices starting Monday (Sept. 9), a move designed to broaden Xbox Music's distribution and audience in order to compete with the likes of Spotify and Rhapsody.

Xbox Music initially launched in October last year only on Microsoft's Xbox 360 game consoles, and on computers and mobile devices running Microsoft's Windows 8 operating system. Users could listen to the service for free with ads, or pay $9.99 a month or $99.99 a year for a premium ad-free version. Earlier this summer, Xbox Music added Web distribution via browsers, but only for subscribers who pay for the premium service. On Monday, Web listeners will be able to access the free, ad-supported version.

Microsoft Presses Play on New Xbox Music Service

The move comes a day before Apple is widely expected to announce the launch of its Internet radio service at a press conference Tuesday (Sept. 10) in San Francisco.

While Xbox Music was designed to be a showcase feature for Microsoft's Windows 8 operating system, the service has had limited success in signing up users, partly because of the small number of platforms it had for distribution. Microsoft declined to share its audience metrics.

The company spent much of this year refining the design to make its service more accessible -- reducing the number of clicks required to play a song, highlighting its playlisting functions, letting users play 15 songs before having to log in and making it simpler for users to manage their music collections.

Though the changes helped to boost engagement, Xbox Music's audience is still seen as trailing those of Spotify's 24 million users, Rhapsody's 1 million users and Pandora's 72 million users.

"Last year when we launched, we said we wanted to deliver all the music in any way people wanted it," said Jerry Johnson, GM of Xbox Music, who oversees more than 300 employees at Microsoft working on the product in Seattle and Paris. "But we didn't have all the devices covered."

In addition, Windows 8 is taking some time to spread, making up just 7.4% of desktops operating systems as of August, according to Net Applications, a Web analytics firm. On mobile devices, Microsoft's share is even smaller, with Windows phones expected to make up 3.9% of smartphone shipments this year, compared to 75.5% for Android phones and 16.9% for iPhones, according to IDC.