Zune’s business heads have made a very smart political move – pay the labels directly for each sales of a Zune player! Oh yes, Bill Gates may not have known about it but Zune has signed a deal with the Universal Music Group (UMG) so that UMG will get a reported $1 for each $250 player sold. Better still, that deal is on offer to all the other major labels. So, Microsoft says it’s prepared to take a hit to make this work, they mean it. “This move demonstrates there can be a win-win situation where consumers have a great experience while labels and artists are also fairly compensated,” says Universal Music Group chairman and CEO Doug Morris. Zune will get preferential licensing from Universal in return.

While not addressing some of the major fault points in the digital music space – compatibility, user rights and pricing of the music, Zune has thrown down a small gauntlet to Apple.

The New York Times has test driven a Zune but with mixed results. Down side: still a closed proprietary system and ‘not cool’. On the upside it’s practical and the sharig facility works (on up to three plays only).