Spend More, Get Less

If you buy a Gateway computer this Christmas season, you may be excited to find that it comes with 2,000 songs pre-loaded. This is the result of a deal with PressPlay, a joint venture between Sony and Universal. Unfortunately, upon receiving your new Gateway computer, you'll find you only actually own 20 of those 2,000 songs, even if you chose the $149.99 "Mega Pack" subscription.

In other words, you can listen to the others as long as you are subscribed to PressPlay, but only 20 of the songs can be burnt to a CD, copied to a portable MP3 player, or even listened to after the subscription lapses. So, like most software bundled with Gateway computers (or any other major manufacturer's computer for that matter), these songs have been crippled.

As the press release states, there is an unquantifiable advantage for those who regularly use the PressPlay service. If you happen to be interested in the latest pop offerings from Sony and Universal, including notable names like the Dixie Chicks and Eminem, then you may find that you do not have to download the song to listen to it on your computer. This is of greatest benefit for those people on modem connections.

Again, however, you cannot listen to those songs elsewhere, and you cannot listen to those songs once you've cancelled your PressPlay account. Nevertheless, "2,000 free songs" will sound good in all the Gateway ads, just as their claims that the bundled music will save you "60 days" of download time sound impressive.

Maybe it's just me, but I think if it really took that long to download music, the industry wouldn't have been too upset about Napster. Of course, the "60 day" figure assumes that you really wanted to listen to all 2,000 songs bundled with your Gateway and, ostensibly, that your dial-up connectivity is provided by Gateway.net. OK, so that was a cheep shot, but I just can't help myself. :)

As an aside, we are truly entering new ground here. Though services like PressPlay have been around for some time, they have been largely ignored. That's not to say people haven't tried them. An Ipsos-Reid study shows that 31% of the people who have downloaded music online have paid for it.

The Gateway/PressPlay bundle indicates a significant shift, both in terms of online music and software as a whole. If such services are blithely accepted, it won't be long until software companies, who are chomping at the bit for reoccurring revenue, switch to a rental model. In other words, you would only "own" Microsoft Office as long as you subscribed to the service. The moment you quit paying for the service, the software on your computer would cease to function.

As noted in past articles, Microsoft, by virtue of it's Windows XP product registration and quick product life cycles, is championing the "software as service" model. With Microsoft software installed on over 90% of the computers in the world, they are bulldozing the way for the rest of the vendors. In fact, Quicken has already followed suit, requiring users to upgrade their software to update their tax tables.

Of course, it's also possible that the Gateway/PressPlay bundle will turn out to be another failed attempt to provide value added services by a company with a serious identity crisis. After all, just a few years ago, Gateway was selling quality mail order computers. Then they tried to make a play on the Internet with Gateway.net, the ISP division. Now, visiting Gateway.net takes you to the Compuserve site.

As they made the switch from a pure mail order play to retail sales via the Gateway Country Store chain, the quality of their computers changed dramatically. They moved away from open architecture PCs towards proprietary, budget computers. Now, they're going for the high end, consumer electronics market with plasma screen TVs. This, of course, follows a round of Country Store closings.

All in all, things do not bode well for Gateway, and bundling computers with crippled songs from a floundering music service adds questionable value to their computers. For PressPlay's sake, it would seem they've chosen the wrong computer vendor to cozy up with. After all, Gateway's tarnished image doesn't exactly invoke images of multimedia PCs, which are usually thought of as higher end products.

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