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Fixing the Music Model: Virgin Media, Universal to Launch Subscription Service in U.K.

In another ambitious scheme to repair the music industry and discourage illegal downloading, Virgin Media inked a deal with Universal Music to offer an unlimited-download subscription service to customers in the U.K. by year’s end. The success of the venture will likely hinge on Virgin’s ability to bring other music labels on board, and as such landing Universal–the world’s largest recording company and home to mass-appeal acts like U2, Amy Winehouse, the Rolling Stones, and Elton John–is a big step in the right direction.

In another ambitious scheme to repair the music industry and discourage illegal downloading, Virgin Media inked a deal with Universal Music to offer an unlimited-download subscription service to customers in the U.K. by year’s end. The success of the venture will likely hinge on Virgin’s ability to bring other music labels on board, and as such landing Universal–the world’s largest recording company and home to mass-appeal acts like U2, Amy Winehouse, the Rolling Stones, and Elton John–is a big step in the right direction. But whether giving away unlimited music for a limited monthly fee spells the industry’s saving grace or adds a fresh verse to its swan song remains to be seen.

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For an as-yet undisclosed subscription fee (the Wall Street Journal‘s “people familiar with the matter” say roughly $25), users of the service will have complete access to Universal’s vast catalog. The service will offer streaming music as well as unlimited MP3 downloads compatible with most music players, including Apple’s iPod and Microsoft’s Zune. Unlike many other subscription services, the music is the user’s to keep, and the files are DRM-free, meaning there is nothing stopping users from copying song files once they’ve been downloaded.

The idea, of course, is to offer a relatively low-cost, law-abiding alternative to illegal file sharing. In tandem with the new service, Virgin has vowed to toughen its stance on repeat piracy offenders, punishing those who insist on illegal downloading with a temporary suspension of service. However, like other Internet service providers, Virgin will not disconnect offenders permanently, and because it will not actually monitor customer traffic for privacy reasons, both enforcement and punishment will lack teeth.

But with the vast majority of downloaded music still taking place outside of legal channels, a deal between ISPs and record labels was inevitable and in fact necessary. By including the ISP in the spoils from the subscription service, Universal has given Virgin Media a monetary motivation to seriously crack down on piracy. If Virgin can convince other major labels to get on board, it’s hard to imagine why music fans wouldn’t fork over a reasonable monthly fee to legally access music rather than rely upon shady file sharing services. If Virgin can successfully expand the catalog across all major labels while proving it can curb piracy on its network, it may just score the game-changing coup that could reshape the global music industry.

[via Virgin Media, Wall Street Journal]

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