Battle of the media ecosystems: Amazon, Apple, Google and Microsoft

When you use media products from Amazon, Apple, Google or Microsoft, you're not just choosing a device -- you're joining a ecosystem. What are these four companies doing to maintain user loyalty? How well are they succeeding?

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Once upon a time, tech behemoths such as Microsoft and Apple battled to persuade businesses and consumers to purchase their computers, mobile devices or software packages.

Those days seem so quaint now.

Today, the battle is on a much larger scale. It is a war between vast ecosystems made up of hardware, software and online services, not just individual pieces of hardware and software. Purchase an iPhone, for example, and you're buying into the entire Apple ecosystem, including operating systems, apps, add-ons, music, movies, books and more. The big money isn't in your single purchase, but in encouraging you to purchase only products and services that interact with each other -- and your wallet.

With BYOD on the rise and our personal and professional lives becoming increasingly intermixed, an individual's choice to buy into one of these ecosystems affects her business use, and vice versa. And while many of us function in two or more of these ecosystems, others increasingly depend on a single system for both personal and business needs.

There are new players in this game as well. Now it's not just Apple and Microsoft, but also Amazon and Google and a host of specialists. Each offers a vast array of products -- and because there are strong differences between them, each offers distinct advantages and disadvantages, depending on which part of the ecosystem you're examining.

For example, Google and Amazon aren't hardware heavy hitters (although Google is indirectly involved in hardware through its Android mobile OS), while Apple and Microsoft are relatively weaker in shopping. Microsoft is strong in gaming, while Amazon rules when it comes to books. But one way or another, they're all locked in a death match.

In this article, we examine four of the largest technological media ecosystems -- Amazon, Apple, Google and Microsoft -- in terms of a variety of media: reading materials (books and magazines), gaming, music, shopping and video, as well as other areas. We also assess each ecosystem in terms of how well it works as a unified whole -- in other words, how smoothly each part of the ecosystem works with all the other parts.

To do this, we've enlisted three writers who have a great deal of experience in covering these ecosystems and reviewing their products: JR Raphael on Google, Michael deAgonia on Apple, and Preston Gralla on Amazon and Microsoft. (Gralla also wrote the introductions and conclusion.).

How do these huge ecosystems compare when it comes to the media marketplace? Let's see.

How do you feel about these large company-based ecosystems? Do they make for a better consumer (and business) experience or do they limit our choices? We'd love to get your feedback -- good, bad or anywhere in between -- in our comments section.

4 tech ecosystems: The basics

How did each ecosystem develop?

Each of the four companies we're covering -- Amazon, Apple, Google and Microsoft -- has a different history, and so their ecosystems have developed in vastly different ways. Microsoft and Apple, for example, were born in the days when tech companies rose and fell based on the hardware and software they sold, while Google is a child of the Internet.

Amazon, on the other hand, started with a vision of an integrated ecosystem almost from its founding -- in a New York Times interview from 2005, CEO Jeffrey Bezos is quoted as saying that it is "...very important to get into new categories beyond books reasonably quickly." You have to wonder, however, if the company ever envisioned the sprawling network it would become.

Here's how each one grew.

Amazon

Entertainment media is part of Amazon's basic DNA: The company was founded as a book-selling site in 1994. When it began branching out into selling other products, it initially focused on CDs and DVDs, and then added games, electronics -- and, eventually, everything else under the sun.

But even as Amazon broadened its reach beyond media, that segment remained a strong focus. Its first acquisitions of other businesses were mainly entertainment-related, including the Internet Movie Database (IMDb) in 1999, the online music retailer CDNow in 2003 and many others.

Today, Amazon is a retail behemoth, but media remains its core business --- witness its Kindle line of devices, all of which are designed to make it easier to buy books, movies, TV shows and music. And while other retailers have attempted to compete -- such as Barnes & Noble with its Nook line of e-readers -- so far, none have made serious inroads against the Amazon Goliath.

So it should be no surprise that its media ecosystem is powerful, well-integrated, and possibly the largest in the world.

Apple

In 1984, Apple's Macintosh was the first mass market computer to ship with a graphical user interface and mouse, opening up computing to users uncomfortable with the then-standard text-and-keyboard-based interface. After that, a flurry of technology initiatives -- from iMovie in 1999 to iTunes in 2001 to iPhoto in 2002 -- emphasized Apple's intentions to bring computerized media to its users.

However, it was the company's first foray into digital audio players that changed Apple's fortunes and validated its strategy. Apple's first music player, the iPod, introduced in 2001, was about the size of a deck of cards. Designed around Toshiba's 1.8-in. 5GB hard drive, it could hold approximately a thousand songs and automatically synchronized data and music content from the Mac using the already popular iTunes as the intermediary. It became the keystone for what Apple co-founder, chairman and CEO Steve Jobs termed his "Digital Hub" concept, where Apple's technology would be positioned at the center of the rising digital lifestyle.

Apple's Macintosh was the first mass market computer to ship with a graphical user interface and mouse. (Attribution: http://www.allaboutapple.com/)

The other shoe dropped during an April press event in 2003 when Apple introduced the iTunes Music Store, which offered the simple pricing structure of 99 cents per song and $9.99 per album. Any song purchase would automatically download and add itself to the music library -- which, in turn, would sync with iPods.

There was, however, a catch: The tracks were encoded with digital rights management (DRM) software, which limited playback and management to three computers (but an unlimited number of iPods).

In 2007, Apple rocked the tech world with the announcement of the iPhone, featuring a single button on a 3.5-in. glass screen and an interface designed to be manipulated with fingers using touches and gestures. The iPhone, like the iPod before it, had access to all of the content in the iTunes/App Store as well as many specialized accessories. In 2010, Apple followed with the iPad, which has become a conduit for users who want to access a wide and still-developing media universe.

Google

Google started in 1996 as a collaboration between two Stanford computer science grad students: Larry Page and Sergey Brin. The service was known as BackRub during its infancy; in 1997, the duo officially adopted the Google moniker.

During its first decade, Google made massive headway in the field of Internet search, an area that had remained relatively stagnant until its arrival. It wasn't until 10 years into its existence that the company really seemed ready to break out of the box.

Google's first steps into the media world happened in the fall of 2006, when Google announced it was acquiring a consumer video startup called YouTube. Then-CEO Eric Schmidt described the merger as a way for Google to provide "a compelling media entertainment service" for users, publishers and advertisers alike.

YouTube paved the way for a rapid expansion of Google's entertainment empire. The company announced its plans for the Android mobile operating system in 2007, with the first consumer handset -- the T-Mobile G1 -- launching a year later alongside the first incarnation of the Android Market.

And things didn't stop there: Google unveiled a Web-centric operating system called Chrome OS in 2009, a television platform called Google TV in 2010 and services for online movie and music streaming in 2011. With each move, the simple search box moved further into the background of Google's persona, although search itself remained at the core of the company's business.

"The search business isn't just about search -- it's about attention," says James McQuivey, a principal analyst with Forrester Research. "Google's newer ventures represent an expansion of the ways the company can get that."

Microsoft

In tech years, Microsoft is an ancient company, founded in 1975 -- nearly 40 years ago -- by Bill Gates and Paul Allen. Back then, the furthest thing on the founders' minds was anything related to entertainment -- they were focused on products such as a BASIC interpreter, and then (with a contract in late 1980 with IBM) on operating systems like PC-DOS. The earliest PCs that ran DOS were far from gaming machines; many games required that users install add-on boards such as those made by a company called Hercules.

In 1982 Microsoft licensed a version of a flight simulation game from a company subLOGIC Corporation and called it Microsoft Flight Simulator 1.0. Not only did the game become popular, but in those early days of PCs, the ability to run Microsoft Flight Simulator (and Lotus 1-2-3) was often used to test whether a machine was 100% compatible with the IBM PC.

Through the years, Microsoft has had media winners and losers. The Zune media player was a notable flop, but the Xbox 360 video game platform and community has become a rousing success, along with the Halo and Age of Empires series of games. Microsoft seems to be holding its own with its Windows Phone mobile devices, but there are a lot of people wondering whether its Surface tablets -- especially the lower-end Surface RT -- are innovative or a mistake.

Still, Microsoft's media system is a work in progress, being very strong in some areas such as gaming, and very weak in others, such as shopping and books.

Books and magazines

Predictions of the demise of printed books and magazines, brought on by digital media, have been premature -- but still, there's no denying that e-books and digital magazines are big business. An annual report from the Association of American Publishers and the Book Industry Study Group found that the entire consumer book market was $15.12 billion in 2012, of which $3.042 billion were e-books. And according to PricewaterhouseCoopers, by 2017 consumer e-book sales will overtake consumer print book sales, with a predicted $8.2 billion in sales. Here's how the ecosystems stack up.

Amazon

When you think of Amazon, you think of books, and with good reason: It's the foundation upon which the entire Amazon empire was built. Amazon is the world's largest book retailer. Just consider the numbers: Amazon has an estimated 60% of the e-book market and an estimated 25% of the market for printed books, according to its competitor Barnes & Noble. Whether you're looking to buy physical books or e-books, Amazon is the place to go. And it sells magazines on its e-reader the Kindle, as well as from its website.

The ecosystem includes the Kindle e-reader hardware, but you're not limited to reading e-books purchased through Amazon on that. There are also Kindle reader apps for the PC, Mac, iOS and Android devices. And Amazon is more than just a bookseller; it's a publisher as well, with seven imprints that cover everything from science fiction to mysteries, romance, nonfiction and literary fiction. It's this simple: Amazon's ecosystem rules the book world.

Apple

Apple made a late entry into digital book sales in January 2010, with the introduction of iBooks. This free iOS app functions as a gateway for the iBookstore -- where e-books are available both for free and for purchase -- and is also used for storing these books, and for reading on Apple's mobile hardware lineup. The iBookstore carries over 1.75 million books in 155 countries, and prices start at free and don't often go higher than $14.99. These e-book files contain DRM, but follow the same rules as video: That is, you can share these books among up to five computers authorized to iTunes, and an unlimited number of iOS devices can be used as they're synced up to any one of the five computers.

If you're not a fan of the iBooks app, or have already invested in another ecosystem, don't panic. Within the App Store, there are over 55,000 apps listed under the Books category, including full support for competing services, like Kindle, Nook and other popular (and not so popular) e-book readers. If you like comic books, there are plenty of choices here, too, with Marvel, DC and Image -- among others -- offering comics for purchase and download to their respective apps.

Apple also spotlights your newspaper and magazine subscriptions in the form of Newsstand, a specialized home screen folder that, when tapped, offers access to all of your subscriptions. There is an option to automatically download content when a change is detected, assuring that whenever you check the Newsstand, the information you are accessing is up to date. The Newsstand icon displays a numbered badge when updates are released. (The icons for newspapers and magazines -- which sit on virtual shelves in Newsstand -- also update themselves to represent the latest cover, which is a nice touch.)

On the other hand, Apple is having some trouble with the government for alleged antitrust actions having to do with e-books: A year ago, the U.S. Justice Department charged that Apple spearheaded a scheme with book publishers to keep the prices of e-books artificially high; on July 10, Apple was found guilty of violating antitrust laws. As of this writing, it was not clear whether the outcome would affect the pricing of Apple's e-books or, ultimately, its market share in the long term.

Google

The Google Play Store has robust sections devoted to book- and magazine-based content. Following the cross-platform model, titles purchased from the Play Store are automatically synced across all devices and can be read on any Android phone or tablet as well as on any other Web-connected device.

Google also has a separate service named -- somewhat confusingly -- Google Books. That service allows you to search for content within actual books and magazines and to read excerpts or full text of some titles. Google Books has been the subject of much controversy within the publishing world because of the complex rights issues related to Google's scanning of older print editions.

Microsoft

If you're looking to buy magazines and books, Microsoft's isn't the ecosystem to go to. This is especially surprising, given that the company invested $300 million in the Nook business, which is built on book and magazine purchasing.

That being said, there is a Microsoft place to go to buy books and magazines: the Windows Store on Windows 8 or on a Windows Phone device. There you'll find a relatively small selection of books and book-related apps, and newspapers and magazines and related apps. So you can buy Dr. Seuss books for your kids, for example, or a variety of dictionaries. But there are very few offerings -- the entire Books & Reference section in the Windows Store, when I last checked, was 1,666 apps and books. For magazines, check the News & Weather section. Again, though, the pickings are slim -- 1,019 apps, and the vast majority of them area news-related apps rather than actual magazines.

You can, of course, download various e-reader apps such as the Kindle or Nook for your computer, tablet or phone, and buy books from Amazon and from Barnes & Noble. But that's really just tapping into someone else's ecosystem, not making use of Microsoft's.

In short, Microsoft falls well behind all of its competitors when it comes to buying magazines and books.

Gaming

Unless you're a hard-core gamer or industry-watcher, you might not know that gaming is a big business -- a very big business. Microsoft estimates that $65 billion is spent annually on gaming: $27 billion on console-based gaming, $12 billion on PC-based gaming, $10 billion on mobile and tablet gaming, $8 billion on social networking/browser-based gaming and $8 billion on handheld device-based gaming. Who's strongest in which category? Which ecosystem is best positioned for the future?

Amazon

Amazon's gaming strategy can be summed up in a single sentence: Buy games and gaming hardware from the site. And it must be admitted that the selection, like everything else at Amazon, is substantial. Name a game and you'll find it; name gaming hardware and you'll find it. You can buy not just boxed games, but downloadable ones as well.

Unlike Microsoft, Amazon doesn't have a gaming hardware platform. Certainly, the Kindle -- one of the very few hardware devices that bears Amazon's imprimatur -- isn't highly powered enough to be a true gaming platform like Microsoft's Xbox. And because the Kindle app store is a closed store, curated by Amazon, the selection of Android games you can download and play on it are limited compared to what you can get on other Android devices via Google Play.

In short, Amazon doesn't really have what can be called a gaming ecosystem. Instead, it sells game-related hardware and software, and lets you play a selection of games on the Kindle. Overall, this is Amazon's weakest part of its entertainment ecosystem.

Apple

Of the 850,000-plus apps currently in the App Store, over 144,000 titles are dedicated to gaming (this figure includes "lite" versions and demos). The number of games isn't indicative of quality, of course, but one can't deny that iOS has been a launching platform for some really great games, both casual and immersive.

Every genre is catered for with the staggering amount of games available. From Tetris to Minecraft, from Grand Theft Auto to Poker, from CSR Racing to Letterpress to Injustice: Gods Among Us, there's a game in the App Store for everyone.

The breadth of games available has spurned an interesting side effect, and that is a plethora of third-party gaming accessories. There are wireless controllers, steering wheels and joysticks; device cases with controllers built in; classic board games like Monopoly that utilize iOS devices to add another level of interactivity; as well as model helicopters, drones and vehicles that can be operated by iOS devices.

Of course, all that has to do with mobile iOS gaming, where Apple has had considerable success. But when it comes to desktop-based gaming, things haven't as gone well, where the Windows PC is the standard. And Apple doesn't have a console to compete against Microsoft's Xbox, either.

Google

Google's entertainment ecosystem boasts what's arguably the most diverse hardware selection of any single platform. The reason: Android is an open-source platform and that means -- for better and sometimes for worse -- that manufacturers can use the software in any device imaginable and modify it in any way they wish.

While Google itself doesn't have a presence in console gaming, a number of manufacturers offer Android-based devices made explicitly for the purposes of entertainment. Sony's Xperia Play phone, for instance, combines a traditional Android smartphone with a console-like game controller for on-the-go play. Nvidia, meanwhile, is currently working on a portable Android gaming device known as Project Shield -- essentially an Xbox-like controller with a high-definition display. It'll be able to play console-quality games from Google Play as well as PC games from a shared Wi-Fi connection.

The common thread linking these devices and the more traditional Android smartphones and tablets is their access to the Google Play Store, which -- as part of its app collection -- offers a large collection of downloadable games for users. Titles range from puzzle and casino games to sports, arcade, and action experiences. Top-selling titles include games like Minecraft, Need for Speed, Plants vs. Zombies, Fruit Ninja and Sonic the Hedgehog.

In May, Google launched a centralized gaming framework called Google Play Game Services. It allows developers to tap into a universal network in order to provide users with the ability to save their games cross-device and cross-platform, as well take advantage of a multiplayer communication system complete with game play invitations, achievement tracking and leaderboards. The platform had 32 games on board at the time of its launch; Google expects more developers to integrate the framework into their titles.

Microsoft

Microsoft's gaming ecosystem is by far the richest and most comprehensive of its competitors, anchored by the best-selling Xbox 360 game console. The Xbox 360 has been the best-selling gaming console for more than two years, according to research firm NPD, which said that in January 2013, the Xbox had 44% of all console sales.

Every single one of the top ten selling games for that month was available on the Xbox, and one of them, Halo 4 (published by Microsoft Studios), was available only for the Xbox. The Xbox Live service lets you play games online against others, and also lets you watch TV and movies.

In fact, Microsoft has spent considerable effort turning its Xbox 360 gaming platform into a well-integrated ecosystem, although it's still a work in progress. You can connect from a Windows 8 device to your Xbox 360, and see your gaming history, download games to the Xbox 360, customize your Xbox Live profile and avatar and more. And there's a free Windows 8 and Windows Phone SmartGlass app you can download that works as a remote control for the Xbox 360. It also displays information about what you're playing or watching on your phone or Windows 8 device. However, you can't actually play the games on the Windows 8 device or Windows Phone. Instead, the game will play on your TV, as you normally do with the Xbox 360.

The Xbox One's new architecture is a combination of Xbox and the Windows kernel, and it has a new, faster processor, a Blu-ray Disc drive, 500GB hard-disk drive and Wi-Fi Direct.

All that is just a prelude to Microsoft's plans for the next generation of the Xbox, called Xbox One. Microsoft's goal is no less than using the Xbox to be the centerpiece of nearly the entire entertainment ecosystem in people's homes. The Xbox One's new architecture is a combination of Xbox and the Windows kernel, and it has a new, faster processor, a Blu-ray Disc drive, 500GB hard-disk drive and Wi-Fi Direct.

It will control your television set and cable TV, and is designed to move easily between gaming and TV watching. It will run Hulu, Netflix and other streaming video services; will play CDs, DVDs and Blu-ray discs; will come complete with Kinect (see explanation in the next paragraph), and will work with Windows 8 devices such as tablets and smartphones. These new capabilities come with a price tag to match: The Xbox One is expected to ship in November, and will sell for $500 (compared to $200 for the existing Xbox).

Microsoft has other gaming resources outside of the Xbox. Kinect lets you play games on the Xbox without a controller -- sensors let you control and play games using your hands, body and voice. Windows is itself a big game platform. And Windows Phone also offers gaming, although because its app ecosystem isn't as rich as for iOS or Android, you'll find fewer games available for it than for its competitors.

The company has also a number of game software megahits, notably the Age of Empires, and especially the Halo series.

Music

After Apple almost single-handedly created the digital music market with iTunes, the world of selling digital music was stable for years: There was iTunes -- and then there was everyone else.

But times have changed and the digital music world is in flux. iTunes was built on selling digital downloads, which in a sense copied the physical world of retailing. You paid money to buy something and then it was yours, with certain limitations due to DRM.

Today, though, music services led by Pandora and Spotify have shown that streaming, not digital ownership, is likely the future of music, and each big ecosystem has taken a different tack in this arena. Read on to see how they compare.

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