Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions
Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions

Reports of a slow start for Windows 8 suggest a bumpy start for Xbox Music, Microsoft's new ad-supported subscription service that was supposed to get a big boost from its integration with its new operation system.

Business Insider and the New York Times recap Window 8's struggles thus far: Windows 8 is off to a slow start, the economy is not helping PC sales this holiday season and there is a steep learning curve (Windows 8 is radically different than its predecessor, Windows 7).

Both Windows 8 and Xbox Music are being hurt by slow sales of Microsoft's Surface tablet. Surface is integral right now for Xbox Music. Without Microsoft's tablet -- Xbox Music can be controlled via the SmartGlass Android app but not on iOS devices -- users have to slog through the Xbox Music experience with an Xbox game controller and thumb movements.

It doesn't help that smaller companies offer better services and are stealing all the attention in subscription music. As Xbox Music is slow out of the gate, Spotify has over 5 million subscribers worldwide (over 1 million in the U.S.), Deezer has over 3 million subscribers worldwide (none in the U.S.), Rhapsody has over 1 million subscribers (mostly in the United States) and Muve Music has over 700,000 subscribers (all in the United States).

Another problem for Microsoft is that artists are unlikely to back Xbox Live over Spotify, which has an artist in residence, and Deezer, which just launched a platform that allows artists to customize their landing pages and upload unique content. And although Rdio is not as popular as either Spotify or Deezer, it also woos artists by paying a bounty for each new customer brought to the service. Quite simply, fans will go where the artists go.