The Zune failed, and Microsoft is ok with that. Besides, it’s not like Zune is really gone. Microsoft is just rebranding it as Xbox Music. It’s going to launch sometime later this year, but we’re still in the dark on a lot of the details. Various leaks hitting the Internet today help to disspel a few of the mysteries surrounding the new service.

First up is the leak from NeoGAF where user Barkley’s Justice shared the following email he received from a distributor:

The time has come… Microsoft is winding down its Zune brand and turning a new leaf as Xbox Music. This global relaunch represents Microsoft’s move to make the games console the entertainment hub of the home, similar to what Sony Playstation did with their Music Unlimited service. The revamped service will offer free-to-user advertising-funded streaming, a single tier dual subscription streaming service, a scan-and-match locker service and ALC downloads.

As users immediately pointed out on the forums, Xbox Music is essentially Spotify. There are a few differences though. The most obvious is that Xbox Music will most assuredly require an Xbox Live Gold subscription. Users wanting to spend the $10 a month on Xbox Music will also have to pony up the $60 a year fee for Xbox Live Gold.

It was also revealed by Engadget that Xbox Music will offer an annual rate of $99.90. Combined with Xbox Live Gold, users would be paying $160 a year for a music streaming service that may only work on their consoles.

What’s strange here is that leak from NeoGAF and the pricing leak seem to contradict each other. The NeoGAF leak says that users will be able to get free streaming through advertising. The pricing leak makes it seem like users will be forced into paying a subscription no matter what. Will paying users get advertisements? Most likely as Xbox Live Gold subscribers are subjected to advertisements on the Xbox 360 dashboard.

For now, all of this is still one big rumor. We won’t know anything for sure until Microsoft announces full details. We’ll probably know something closer to the launch of Windows 8. I wouldn’t be surprised if Microsoft ditched an advertisement-supported model and just made everybody pay for the service. It looks like Spotify won’t be going anywhere anytime soon.