Microsoft is focusing on prepping its digital media player and the adjacent music services for the 2008 holiday season. In this regard, not only has the Redmond company updated its Zune firmware and software delivering version 3.1, but it has also reduced the price of Zune 4GB, 8GB and 16GB devices, and now is revamping its Zune Pass subscription model. Essentially, Microsoft has reached an agreement with music labels, and is ready to offer Zune Pass subscribers no less than 10 tracks per month, which they can keep permanently.

Microsoft estimates that the 10 songs Zune Pass members will be able to add to their permanent subscription and keep, independent of whether they choose to discontinue their subscription, are worth $10. The new model will add no further costs on top of the $14.99 per month Zune owners pay for unlimited access to all the songs via the Zune Pass subscription service.

“Starting [November 19] at about 11:00PM Pacific Time, everyone with a Zune Pass gets to keep 10 tracks from Zune Marketplace, each month. These 10 tracks will be yours to keep, forever. Each month that you keep your Zune Pass current, you’ll get another 10 tracks credited to your account.  All this for the same price as your Zune Pass today: 14.99/month, or about the price of one CD per month. So each month as you discover and download new music in Zune Marketplace, you’ll be able to keep 10 of your favorite tracks. One quick note: there is no roll-over, so make sure you collect your 10 tracks each month,” revealed Microsoft's Cesar Menendez.

The Redmond company has managed to convince heavyweight music labels such as EMI Music, Sony BMG Music Entertainment, Universal Music Group (UMG), and Warner Music Group, but also independent industry members. Via the new Zune Pass model, members will end up owning 10 digital rights management (DRM)-free MP3 tracks, with each month of subscription. The Redmond giant claims that over 90% of the collection of more than 4 million items on Zune Marketplace are offered as DRM-free MP3s.

“The way people consume music has changed. With the shift to digital from CDs, it is more challenging than ever to offer the right mix of deep content, music discovery and economic value,” explained Chris Stephenson, general manager of Global Marketing for Zune at Microsoft. “People want the freedom to listen to whatever they want, across millions of songs, combined with the confidence that they can keep their favorite tracks forever.”