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ISP Virgin Media UK Hits Another Snag with Independent Music

Posted: 30th Mar, 2010 By: MarkJ
virgin media musicPlans by Universal Music and Virgin Media UK to launch a DRM-free music download and streaming service for its broadband ISP customers have hit yet another problem. The Merlin Network, a non-profit organisation charged with representing independent music companies, has been unable to reach a fair price with VM for its content.

Quote from Merlin to its Members, as posted by The Register today:

"Merlin’s position is that it is not prepared to accept deals that do not in our judgement recognise the true value of the collective licence we offer, which in the UK, according to the 2009 Official Chart Company scan figures represents close to 11% of the digital market.

Although we are deep into negotiations with Virgin Media, we do not believe we have yet reached a point where Virgin Media’s offer in our view acceptably values a collective license to our members’ repertoire and as a result we will not agree to this offer in its current form."

Virgin's forthcoming service, which some reports say will be called Music Fish and others claim Music Unlimited (neither are confirmed), is certainly no stranger to problems. The provider had originally intended to launch a fully P2P based "unlimited" music service, although several big music labels managed to scupper that idea.

Since then the operator has faced further delays due to similar negotiating difficulties with Sony and EMI. Virgin Media has always sought the ability to offer an "unlimited" product but the major labels haven't been keen on that idea. Meanwhile the very thing that such a service would seek to curtail, illicit copyright P2P file sharing, continues.

It's important that Virgin Media gets this right because, haggling over price and quantity aside, failing to strike the right balance could lead to a service that consumers find unattractive. Past rumours have suggested that a price point of £15 per month is likely to result in a monthly limit of 40 music track downloads.

Meanwhile Virgin and Merlin are "still working" on reaching that all important agreement. It's unlikely that every ISP in the market would have enough clout to negotiate similar agreements, which could leave smaller ISPs in the lurch. The potential impact upon existing legal music download websites is also uncertain.
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