Virgin Scraps Legal P2P Music Plans After Labels Get Jitters
Virgin Media (NSDQ: VMED) has scrapped groundbreaking plans to pay music labels for songs its customers download illegally - effectively legitimising P2P - after lack of support from some of the majors, The Register first reported and paidContent:UK has confirmed.
We learned last year Virgin Media was talking with Playlouder MSP - a veteran vendor working on the model - about creating the service, which was due for launch this Q1. But what The Reg now says was to be called “Virgin Music Unlimited” has been scuppered at the last minute by major-label demands the ISP block transfer of songs outside of computers owned by subscribers.
The service would have been revolutionary, helping to monetise some of the 95 percent of music downloads the music business acknowledges are illegal. Virgin would have effectively allowed paying subscribers to continue transferring songs over P2P networks, and would have paid royalty collectors for the privilege.
Playlouder strategy director Paul Sanders told paidContent:UK: “The music service as it was conceived is on ice. It’s incredibly sad for both sides, and even sadder for consumers as the research from MidemNet shows consumers want legal P2P services and want to buy them from their ISP. The project is off and the project team is stood down.”
As the music biz is nearing its last chance to build conventional retail stores that can make a dent in illegal downloading, momentum had recently gathered behind the radical legal P2P model. Isle of Man’s government this week mooted a plan to legalise P2P in return for raising a €1 levy on ISP customers. Billy Bragg manager Peter Jenner told this weekend’s MidemNet in Cannes: “The music industry is in the fing dumper; the reality is we’ve got to compete with free.”
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The news is a blow to pioneering Shoreditch, London-based Playlouder, which has been trying to popularise the model after setting up its own small ISP as far back as 2003. After switching to focus on providing the service on a white label basis, it had concentrated its efforts on working with Virgin Media. Still, the increasing prominence now being given to the legal P2P model - and the fact that Playlouder has garnered so much experience in the area - means its work may not be lost. Sanders told us: “Playlouder MSP has had a fantastic amount of interesting from around the UK and Europe, and we will be accelerating those discussions now we are free to do so.” Sounds like the company is certainly open for business.
UK Music CEO Fergal Sharkey said at Midem an ISP accord with the music biz is “weeks away”. But, with this plan having disappeared, music offerings likely to be created are more likely to resemble conventional download stores or subscription packages. Sky’s JV with Universal, announced last year, has gone remarkably quiet.
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@robertandrews
Jan 23, 2009 12:42 PM ET
Posted In: Entertainment, Music, Legal, Technologies / Formats, P2P, Companies, Virgin, Virgin Media
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