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Microsoft Corp. on Tuesday reduced pricing on its flash-based Zune portable digital media players and also shifted its Zune Pass subscription model and now its customers can keep certain number of tracks that they have access to as Zune Pass subscriber. Microsoft hopes that both moves will make Zune more successful on the market during holiday shopping season amid economic slump.

After the price slash, Zune 4GB costs $99, Zune 8GB has $139 price-tag and Zune 16GB is sold for $179. The hard disk drive-based models Zune 80GB and Zune 120GB – still cost $229 and $249, respectively. Earlier this week Microsoft released firmware update 3.1 for its portable digital media players that adds new simplistic video games to the player as well as improves overall stability of the device.

In addition, Microsoft also changed its Zune Pass music subscription service. The Zune Pass subscription service previously gave consumers on-demand access to millions of tracks for $14.99 per month. Starting today subscribers will also get to select 10 tracks per month to keep and add them to their permanent collection (an estimated $10 value).

Agreements to let users keep ten tracks have been signed between Microsoft and EMI Music, Sony BMG Music Entertainment, Universal Music Group (UMG) and Warner Music Group, as well as independent distributors INgrooves, Independent Online Distribution Alliance and The Orchard. The new enhanced subscription model came about as a result of close collaboration with all of these companies, Microsoft indicated.

Zune Pass subscribers will have the added benefit of retaining digital rights management (DRM)-free MP3 tracks from Sony BMG and UMG, in addition to MP3 tracks from EMI Music, Warner Music Group and a large portion of the independent music labels. With the addition of tracks from UMG and Sony BMG, Zune will soon offer over 90% of its music in the MP3 format, Microsoft said.

It was logical for Microsoft to sign an agreement with leading labels to allow end-users to keep certain tracks now that virtually free music subscription services like “Comes with Music” by Nokia emerge.

Tags: Microsoft, Zune

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