Zune chief leaving Microsoft; technologist to tackle duties

Microsoft announced the departure Wednesday of the executive who had the tough task of negotiating contracts with big music labels that would give the company's Zune an edge over Apple's dominant iPod.

Bryan Lee, corporate vice president of Microsoft's entertainment business, is leaving "to pursue personal interests," a company spokeswoman said.

His responsibilities included marketing and business development for the Zune, which Microsoft introduced in November. Lee, 43, also oversaw Microsoft's eHome group, which handles Windows Media Center Edition, and the company's television efforts.

"I hired Bryan back in 2000 to drive business development for Xbox," Robbie Bach, Entertainment and Devices Division president, said in an e-mail to employees. "Over the last six years, I've had the luxury of repeatedly asking Bryan to take on greater responsibility and leadership and then watching him deliver."

Microsoft TV and eHome will report directly to Bach.

Responsibility for Zune falls to J Allard, who will handle both the business and technology sides of that effort.

Allard, 38, also served as an Xbox vice president and is known for a 1993 memo that alerted Chairman Bill Gates to the importance of the Internet.

When Gates announced in June he will be stepping down from his day-to-day role at Microsoft in two years, Chief Executive Steve Ballmer identified Allard as one of a handful of technologists who will help fill the void.

While Allard was the force behind Zune's technology, Lee brought "deep roots" in entertainment, according to his Microsoft profile, having spent 13 years negotiating movie contracts at Sony Pictures Entertainment.

Rob Helm, research director at Kirkland-based Directions on Microsoft, an independent research company, said Microsoft aimed to put that experience to use in developing relationships with content owners in support of the Zune.

"Microsoft was really hoping that they could kick off a better relationship, for example, to get support for sharing wirelessly, which is one of the most exciting features of the Zune, something that differentiates it from the iPod a bit," Helm said.

Song sharing would be limited to three plays within three days. And last month, it was discovered certain songs for sale on the Zune Marketplace cannot be shared.

"Microsoft really hasn't succeeded to get the content owners to open up to the extent it would like them to," Helm said.

"Most music can be shared," a spokeswoman with Microsoft's outside public-relations firm said, adding that any problems stem from the wireless sharing feature being a new concept to the industry. "It's certainly not because of lack of support from content partners."

Microsoft Entertainment and Devices spokeswoman Molly O'Donnell said the company is on pace to meet its goal of selling more than 1 million Zune devices by June 30. Apple sold 21.1 million iPods last quarter alone.

She said Lee will stay on for several weeks to help with the leadership transition.

Material from Bloomberg News is included in this report. Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com