One of the good pieces of news that came out of the Windows Phone 7 launch was that it would be released in Canada at the same time as it was in the United States. This might not seem like much; or all that important – unless of course you live outside of the U.S., but considering that in the general course of launched services and products by U.S. companies, Canada is generally left in the dark.

So when the news came out about the simultaneous launch, there was a general round of high fives among Canadian tech bloggers that for once we would be able to get to play along with everyone else. Not only that, but two other integral services that had been U.S. only would also be opening up in Canada as well. I am of course talking about the Zune Marketplace and Xbox Live.

We were in nirvana; and then reality hit.

Background

The versions of both those services where actually a mere shadow of the U.S. version. There was was one big problem for anyone in Canada that had signed up for a Windows Live account using ‘faked’ U.S. information – we were screwed. I wrote about this huge gotcha back in September 2010 where I said:

You see, even though the Zune Marketplace and streaming service is suppose to be geo-locked so that only U.S. residents were able to use the service, it didn’t stop people from other countries from jumping through all kinds of hoops in order to access Zune. That is one of the reasons that the 90210 zip code contained so many residents – or at least when it came to web sites and services.

In many cases the simple act of selecting the US as your country of origin and using that famous zip code was enough to sign up and be able to use the service. This has happened on Zune and on Xbox Live as well, and this is where all hell is going to break loose.

You see, once Zune, and Xbox Live, are legally available in your country, and in my case it would be Canada, you are going to want to go into your profile and switch your setting to show your real country of origin – except you can’t.

The only real solution was to create a whole new Canadian based Windows Live account; which is a pain in the butt, mind you) but it still didn’t bring us anywhere close in parity with our U.S. cousins. Sure, we might have access to Zune Marketplace and Xbox Live but as I outlined in an open letter post in October 2010 to Microsoft; and Microsoft Canada, it was a version of the services that were missing some key features (please see the original post for the associated screen captures):

However in light of the launch of Windows Phone 7 ,I decided to switch everything back to use Canadian regional settings – except that I couldn’t now sign into Zune using my 10 or 12 year old Hotmail account because I couldn’t change it to being my real Canadian address. In the end I had to create a whole new Canadian Hotmail account and use it to then create new Zune and Xbox accounts so that I could use the services.

This is when I noticed that Canadian accounts are getting short shifted of a variety of things. First up – where the hell is Smart DJ?

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But even more confusing is that when I log into Xbox Live with my “US” Hotmail account I have the ability to buy goods with PayPal, which for me is one of the biggest selling points of any service which is why I really like Valve’s Steam game store.

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But when I sign in with my “Canadian” Hotmail account PayPal is gone, which makes the service – and Zune’s marketplace as well – totally useless to me.

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So here’s my question Microsoft and Microsoft Canada – why are we getting screwed like this?

Well it turns out, thanks to a trusted source, that we have some answers and as I suspected this isn’t something that Microsoft can be blamed for. well, not totally anyway.

The Easy One To Fix

First up let’s deal with the simplest one, and one that Microsoft could fix tomorrow, that being the integration of PayPal as a payment option. It turns out that this is strictly a U.S. option but not something that is set in stone as being a final decision. As my source tells me in an email:

Paypal is an easy one. I’ll cover that one first. I was told by the Canadian group that they are monitoring PayPal success in the US are open to exploring the possibility to include it (and other mechanisms) if it makes sense. To be clear – there was No commitment on IF or WHEN they MIGHT or MIGHT NOT.  Good thing to note is that it’s a Canadian decision, not worldwide one.

As you can see, this is strictly a decision for Microsoft Canada to make. It is up to them to see that PayPal is included as a payment option in their marketplaces. So to all those Canadians out there who want to have this option it is obviously up to us to push this issue so contact Microsoft Canada and let them know how you feel about this issue.

The More Complicated Issue

The second major issue with the Zune Marketplace specifically, of which the missing Smart DJ option in the Zune software is a hint of, is the lack of music content or any of the metadata that goes with it. It is also a problem that Microsoft, as well as any service like it coming into Canada faces has next to no control over.

This problem lies right at the feet of the content companies i.e.: music labels. It is also the same problem that Netflix is constantly fighting with their Canadian version of the streaming service. The content producers (movie companies, music labels, and television networks) are making it incredibly hard for these services like Microsoft’s and Netflix to carry content because of the exorbitant licensing fees they want.

As my source continued in his email when it comes to this issue:

SmartDJ is also an easy one, but has some complexities.  On the easy side,  it requires marketplace access with music in order to work. On the complex side – in Canada, there is no music content / metadata.  Why? It comes down to negotiating with the owners of the music rights and government agencies in order to have music content to make up a marketplace and therefore provide metadata. Despite the level of integration we now enjoy between US and Canada with the internet in all sorts of situations, all companies are faced with the legal differences between the two countries. Look back at when iTunes was launched – US only, no Canada. When Canada came out (and still true today) there was not and still not feature or content parity.  Will it change? I don’t have visibility or a clue. Do I want it to change?  Hell yeah.  I’m a consumer too! Same thing goes for companies like Amazon, Barnes and Noble and other multi-nationals – geographic country/legal differences.

It is also this kind of thing that is keeping services like Pandora, Hulu, and other entertainment services out of Canada. They can’t afford to pay the extortionist rates being demanded.

Where does this leave us Canadians?

Well, for the time being, still pretty well screwed.

Microsoft can fix the issue of no PayPal support, and I really hope they do ,because I know I would like to be able to buy their products online; just as I am sure that many other Canadians would like to. As I said though, this is going to take us stepping up and letting Microsoft Canada know that we want this option.

As for the content, and information availability in the Zune Marketplace isn’t a Microsoft problem. This is our government and entertainment companies creating an unfair playing ground by using regulatory red tape and financial extortion to benefit themselves.

Unfortunately, as long as our government continues to suck up to the Canadian entertainment companies and the American media companies I don’t believe this is a situation that will change.

Remember this when you try to go and buy something in the Zune Marketplace or use your Xbox 360 Live as an entertainment hub – don’t go shouting at Microsoft (or even Netflix) for trying to screw us.

If anything, we as a country should be doing everything we can to help companies like Microsoft, Netflix, Hulu, and Pandora fight against this growing triumvirate of national broadband providing content companies.

The real enemy here are Bell, Shaw, Rogers, Cogeco, and our spineless government – not Microsoft.

[Cross-posted at Winextra]