virgin, universal team up

From CP24

Virgin Media, the cable TV operator owned by entrepreneur Richard Branson, on Monday launched a new kind of music download subscription service with Universal, the world's largest music company.

The service, described by the companies as a world first, will allow Virgin Media's broadband customers in Britain to stream and download as many songs and albums as they like from Universal's catalogue for a fee.

The music will be available to download in an MP3 format, giving buyers the ability to listen on a range of devices, including the iPod, mobile phones and PCs as well as other MP3 players.

The subscription service, due to be available later this year, comes as the music industry fights a losing battle against illegal downloading of music.

Revenue from digital music sales rose 25 per cent last year to $3.7 billion, according to the International Federation of the Phonographic Industry. But those legitimate music sales did not come close to offsetting the billions of dollars being lost to music piracy -- an estimated 95 per cent of music downloads are still unauthorized.

IFPI Chairman John Kennedy said the new Virgin-Universal deal was "the kind of partnership" between a music company and an Internet service provider (ISP) that he expects to shape the future of the music business internationally.

The IFPI has been harshly critical of ISPs in the past for exploiting loopholes in copyright laws to allow them to avoid clamping down on people who illegally download music using their services.

"It epitomizes the way in which the music business is adapting to the digital world, embracing new business models and responding to the changing needs of consumers," Kennedy said of the new service.

"It also marks new ground in ISPs' willingness to take steps to protect copyrighted content on their networks, and that sets a very encouraging example to the whole industry," he added.

Virgin and Universal said they expected the new service to "drive a material reduction in the unauthorized distribution of its repertoire across Virgin Media's network."

They will also implement a range of different strategies to educate file sharers about online piracy and to raise awareness of legal alternatives, including a temporary suspension of Internet access for persistent offenders.

Virgin added that it was continuing talks with other British major and independent music labels and publishers about including their artists in the new service.

It did not release details of the anticipated monthly subscription costs on Monday, but said an "entry level" offer would also be available for customers who download music regularly, but may not want an unlimited service.

"Britain has a world-class reputation for artists and music," said Lucian Grainge, Chairman and Chief Executive of Universal Music Group International. "Now British consumers will have access to a world-class digital music service. I believe this puts all of us at the forefront of a new era."