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EMI and Sony Fear Virgin Media Unlimited UK Broadband ISP Music Service

Posted: 10th Sep, 2009 By: MarkJ
Insiders working for two of the world’s biggest record labels, EMI and Sony Music, have raised fears over plans by Virgin Media and Universal Music to launch an "unlimited" broadband music download service before Christmas. The labels are worried that the service is fundamentally flawed and could threaten other online music outlets by cannibalising their sales.

This fear is of course nothing new and UK broadband ISPs are obviously in quite a privileged position to offer something special to customers because they exist at the first point of Internet access. Mix in a little ignorance about net neutrality and some ISPs could even favour their own service while throttling bandwidth for rivals (iTunes would love that).

A label executive involved in the negotiations told NewMediaAge:

"We want to work with Virgin Media as a partner but any deal has to sit comfortably with how we value our assets against how it values its customers. We have to evaluate each deal as it comes in and make sure we’re happy with the overall value of the proposition.”

The service itself, which was revealed in June (here), will enable any Virgin broadband customer to both stream and download as many music tracks and albums as they want from Universal's catalogue, in return for a low monthly subscription fee (Virgin tell us this will "cost less than the price of a couple of albums a month"). An "entry level" offer will also be available for customers who download music regularly, but may not want an unlimited service.

A Virgin Media spokeswoman said:

“We’re making good progress in developing the service and are on track to launch before Christmas. We’re in talks with both major and independent labels and are committed to launching a comprehensive service.”

It's also understood that both Virgin Media and Universal Music will work together to protect intellectual property. This will involve implementing a range of different strategies to educate file sharers about online piracy and to raise awareness of legal alternatives. They include, as a last resort for persistent offenders, a temporary suspension of Internet access.

However Virgin Media will have a tough time getting its new service online without the support of other major labels, though Warner Music remains in consultation over the matter. The big labels have already scuppered Virgin's original P2P based plan for a music sharing service (here). We can only imagine the furore that would erupt if they did it a second time because developing such a service is anything but cheap.

Meanwhile Sky intends to launch a similar service with Universal Music, yet details on that remain few and far between (here). We suspect that Sky is having the same problems as Virgin Media , hence why they've been so quiet for most of the year.
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