There was a time when the record labels could charge $20 for 50 minutes of music on a plastic CD. Now, desperate for digital sales, Universal Music has been forced to reduce its enitre catalogue to being the thing UK web surfers get for free if they access the Internet through Virgin media.
LONDON, June 15 (Reuters) – Cable TV operator Virgin Media (VMED.O) is to launch a “ground breaking” unlimited music download subscription service through a partnership with the world’s largest music company, Universal.
The service, which both sides describe as a world first, will allow any Virgin Media broadband customer to both listen by streaming and download to keep as many music tracks and albums as they want from Universal’s catalogue in return for a fee.
The music will be in the MP3 format, meaning it can be played on the vast majority of music devices, including the iPod and mobile phones. The service is set to launch later this year.
Virgin said as part of its cooperation with the music industry it would also work to help prevent piracy on its network by educating users and would, as a last resort for persistent offenders, suspend Internet access.
Virgin said no customers would be permanently disconnected, however.
The music industry has been desperate to boost digital sales in recent years to overcome the impact of piracy and has slowly signed up to new online services which offer music in a range of different ways.
Analysts have said the industry would not get a complete breakthrough until it offers an unlimited subscription service, where the price is bundled into other monthly fees such as broadband, so customers forget they are paying for the music.
Virgin’s service will offer a cheaper “entry level” for customers who download music regularly but who do not want an unlimited service, and those who want an unlimited service.
Virgin said it was also in talks with other UK major and independent music labels and publishers to offer a complete catalogue by the time it launches.
“We see this as completely ground breaking,” Universal Music Chairman and Chief Executive Lucian Grainge told reporters. “We’ve listened to our customers, our fans and our artists and we think that this is an opportunity to bring music to a wider audience.”
(Reporting by Kate Holton; editing by Simon Jessop)