Can it really be almost three years since I first wrote about Microsoft's lame attempt to develop a device which would dethrone the iPod as king of music players?

Back in January of 2004 I was writing about Microsoft's Portable Media Center, which tried to out-iPod the iPod by doing video. Six months before the device actually hit the shelves and proved me right, I concluded that Microsoft was on completely the wrong track because (a) music, not video, is the killer app for music players, (b) consumers really, truly don't want a Windows interface on a piece of consumer electronics, and (c) the hardware and software need to be tightly integrated, not made by two different companies.

That was then, this is now, and now we have the Zune. Microsoft seems to have learned a lot this time around, but now they're making an entirely new set of mistakes, as one reviewer emphatically points out.

Mirosoft's fundamental problem is that the market has evolved over the past several years. Initially, people bought MP3 players mostly to play their existing music collections, and there was no way to buy music online.

At the time, though, the music companies were desperate to find an online model which worked (shutting down Napster having done little to actually slow down the online sharing of copyrighted music), and they were willing to give Apple fairly reasonable terms for its iTunes Music Store: a fair, fixed price per track, and use restrictions which most consumers can live with.

Now that the iPod and iTunes Music Store have become such overwhelming successes, though, the music companies wish they had been a little more demanding. Since Apple has the vast majority of the market, no record label can dictate terms to Apple: Apple can cut them off from the increasingly lucrative online market, and hardly suffer at all.

Microsoft, on the other hand, desperately wants to break Apple's lock, and needs to have a well-stocked music store in order to gain a foothold for the Zune. The record companies desperately want to force Apple to accept different terms for the iTunes Music Store, which requires having a credible competitor.

So the record companies forced Microsoft to accept the kind of deal they wish they could get from Apple: absurdly onerous DRM (the Zune locks up public domain music), variable pricing (more popular music costs more), and even a cut of the revenue from Zune sales. They even forced Microsoft to cripple the Zune's one and only innovative feature, sharing music via WiFi.

Microsoft has made its own mistakes, too: the Zune utterly lacks the "cool factor" of the iPod, being too big and clunky-looking; and not providing Vista support on Day 1 is a gaffe of inexplicable magnitude.

Still, there's no small amount of irony that the music companies' desperation to force Microsoft to accept less-favorable terms for online music for the Zune will play a large part in dooming the effort to create a credible competitor for the iTunes Music Store.

It must be fun to be a record company executive and live in a world where you think consumers are so desperate for your product that they will buy it no matter what the price or no matter how absurd the terms.