Microsoft's Music Service Will Rival Spotify, Apple

Unnamed sources have provided a little insight to Microsoft's mysterious music service.

Additional details have surfaced regarding Microsoft's Xbox Music service, shedding some light on Microsoft's post-Zune attempt. It was briefly announced last month during E3 2012, reportedly without having any deals set in place with the four major record labels. There was also no information provided as to how it will work, and when it will be launched.

But sources now claim the Redmond company is currently in talks with Sony Music, Universal Music Group, Warner Music Group, and EMI to secure the needed rights to launch a music service by the end of the year. Without all four on-board, Microsoft will risk launching a service that has fewer artists than its failed Zune platform, they said.

Microsoft is essentially starting over after its attempt with Zune. However this time the company wants to provide a product that lets customers consume music any way they want. Microsoft will reportedly close Zune and move all users over to "Xbox Music" on an unspecified date.

Despite the Xbox label, the music service will reportedly be tied to Windows 8. This isn't surprising given that the operating system, unlike Windows 7, will span across multiple form factors. Windows Phone 8 will share the same core as reportedly will the next Xbox console, slated for an E3 2013 showing (speculation). A web-based storefront and additional apps will likely be offered for other platforms.

With Xbox Music, Microsoft wants to address consumers on several fronts. By taking the Spotify approach, Microsoft will offer subscription-based music consumption on a monthly or yearly basis. By taking the Apple approach, they'll be able to purchase and stream the music they want. Additionally, Microsoft supposedly wants to provide a virtual locker service that allows users to store external purchases (from Amazon, Apple, Google etc) for a monthly or annual fee.

Sources claim Microsoft is in the early stages of negotiations, and may end up not receiving all the rights it's currently seeking. But if Microsoft does land deals with all four labels, Microsoft may simply choose to roll out Xbox Music features over time instead of launching the service as one package.

During Microsoft's E3 2012 keynote, Microsoft said Xbox Music would provide a library of more than 30 million tracks for the PC, Windows 8 tablet, Windows Phone and the Xbox 360. Despite the Metro interface, it came across as a Zune re-brand, underwhelming trade show attendees.