Virgin’s solution to piracy not sitting well with all record companies

Well color me surprised but not all of the record companies are happy with UK ISP Virgin Media’s planned subscription service for downloading music.

The UK company believes that consumers want to be able to download as much music as they want and without it being loaded down with DRM restrictions. It’s newly announced subscription service is built around this idea that will allow their subscribers to download as much music as they want for an additional monthly fee and allow them to keep it permanently. The fee for the service hasn’t been announced but people in the know are suggesting it will be around the £15 mark.

At this point only Universal and some smaller indie labels have signed up with the ISP’s service. The other record companies, like Warner Bros, EMI, and Sony Music aren’t too happy with the service as they believe that it will cannibalize their existing digital sales. They also don’t believe that it will do anything to convert persistent file-sharers.

A Virgin Media spokeswoman said it’s committed to launching a “comprehensive” service this year. “We’re making good progress in developing the service and are on track to launch before Christmas,” she said. “We’re in talks with both major and independent labels and are committed to launching a comprehensive service.”

However, while record labels are keen to work with Virgin because of the reach it offers via its 3.7m broadband subscribers, they argue the music download service needs to make commercial sense.

A label executive involved in the negotiations said the labels support Virgin Media’s music plans in theory, but any service must deliver both feasibility and scale.

“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,” he said. “We have to evaluate each deal as it comes in and make sure we’re happy with the overall value of the proposition.”

Source: New Media Age – Record labels cast doubt on Virgin Media’s music model

Somehow I don’t hold out much hope that the Virgin Media subscription idea will end up seeing the light of day.