STUFF BY ME WEEK-ENDING 12 DEC 2009

There was speculation this week that Virgin Media may have to rethink their plans to launch an all-you-can eat MP3 download offer because three of the four major record companies remain unconvinced by the proposed service, and therefore won't licence it their music.

Virgin announced their bold plan to launch the unlimited-MP3s-for-a-monthly-subscription service earlier this year, with the biggest music company of them all, Universal Music, already on board.

Under the proposals, Virgin Media internet customers would be able to pay a set monthly fee to add a special music service to their existing net package. The music service would enable users to download as many MP3s as they wanted from a catalogue of potentially millions of tracks.

The proposals have similarities with Nokia's Comes With Music offer, where a new phone comes with a year's subscription to a similar service. The big difference, though, is that Nokia's downloads come with digital rights management technology which locks the tracks to the phone or PC to which they are downloaded. Get a new phone or PC - as everyone will do eventually - and your music collection is gone.

The Virgin service, by providing MP3s without DRM, would basically enable you to put your downloads on any device, and keep them long past the expiry of any Virgin Media internet contract, and long past the life of any one PC or digital music player.

This means that, in theory, you could sign up to whatever the shortest internet contract was available (presumably 6 or 12 months) and, in that time, download every single song ever made (well, the several million on offer), and then run away, never paying the net firm nor the record industry another penny. Presumably Virgin couldn't risk that happening if they were paying all the record companies even a heavily discounted per-track fee for each download, which means presumably there is some deal in which the ISP and its record company partners would share the revenue and the risk.

And to that end I also expect that Virgin and Universal's business model is based on the assumption that few people will actually grab three million tracks and run at the first opportunity. The initial novelty of the proposition might lead some to download thousands of tracks in month one, but after that it is more likely subscribers would be downloading tens or maybe hundreds of tracks, but not thousands or millions.

Virgin argue that such a user-friendly all-you-can-eat service is the only thing that can truly compete with the everything-is-free music experience available via unlicensed and therefore illegal file-sharing networks and communities. Of course the Virgin service won't be free, but it will be as good as, given people are already used to adding premium services to their ISP and cable TV accounts.

And people may be even more willing to pay if the much discussed crack-down on file-sharing - 'three-strikes', warning letters and net suspensions - ever really takes off. Virgin's implication is that if labels sign up to its proposition it will participate in that crack-down, while many of its competitors in the ISP sector oppose it.

Despite all that, the other three majors seemingly remain unconvinced, hence the originally mooted Autumn launch did not come to pass. Last week there were rumours that EMI were the most positive of the other record companies, but that they favoured a 'capped' service. So, not all-you-can-eat, but lots-to-eat. This would basically make Virgin's offer a major-label endorsed version of eMusic, the independent download service where you get to download a set number of MP3s each month in return for a monthly subscription. The unit prices of each download works out quite a bit less than the standard 79p per track price point of a la carte download services like iTunes.

Some have criticised the other three majors for their lukewarm response to Virgin's grand plan, and suggested that their failure to play ball disproves the record industry's claims, ahead of the publication of the three-strikes supporting Digital Economy Bill, that they were all now embracing consumer-friendly digital business models. Others go further and say any legislation that involves the suspension of persistent file-sharers should be reliant on a commitment from the record labels to back services like those proposed by Virgin.

I'm not so sure. To be honest, if I was EMI, Sony or Warner I wouldn't licence the Virgin Media service as it currently stands unless they were offering silly money advances, which only really start-up digital ventures can and do. And even if they were, accepting such advances could be short sighted.

I think a service which says "pay us £120 over 12 months and have an MP3 of every song ever made", while bold, and exciting, risks destabilising the existing streaming music and a la carte download business models that are slowly gaining momentum.

While there is much work to be done on how these services are licensed, and on what record companies charge, I think the basic model that is slowly emerging - stream any song for free alongside ads, stream any song with no ads for a monthly subscription, pay a unit price to download a permanent copy - is a good model, and one the record companies have a duty to help nurture and protect.

While Universal's recent "let's try everything and hope something works" attitude to digital has been refreshing, coming, as it did, after years of the "let's try nothing and hope the internet goes away" attitude of all the majors, I think now is the time to start looking at where we're at. To consider what existing business models are sustainable. And to give the company's operating those models a few breaks. And the sustainable model, in my mind, is the 'free stream/ad-free subcription stream/a la carte download' system I described above. Let's work on that.

Plus, I remain unconvinced by the all-you-can-eat concept in general. I'm not convinced most music fans want it, and there was some interesting data from Entertainment Media Research last year that showed casual music consumers certainly weren't interested in services offering downloads of every song ever. And just because that's what the P2P world has offered thus far isn't necessarily reason enough to go down that route.

I think that once teenagers have got over the excitement of "my hard-drive's got more GBs of music than yours", they will actually become more selective of the music they want to listen to, and therefore of the MP3s they want to download. Sure they might not want to pay 79p for every download, but what about EMI's capped version of the all-you-can-eat service? If Virgin's service offered 50 MP3s a month for a tenner - so a 20p per download rate - then that, I think, could actually be as compelling as the unlimited MP3s offer. Especially if it is accompanied by the sort of editorial, expert and peer recommendations, easy navigation and customer service the P2P thing has never really offered. Either way, it's a lot less risky for the record labels long term.

Despite all the doom and gloom and angry debate, I'm actually increasingly optimistic about the future of digital music, and therefore the recording and music publishing industries that will licence the streaming and download platforms, and generate revenues from them. But that optimism doesn't rely on draconian anti-piracy laws or on the acceptance by the industry of all-you-can-eat - both are, I believe, a distraction. With a reform of digital licensing - systems and rates - I believe everyone can ultimately win, and without disconnecting file-sharers or forcing labels into all-you-can-eat. It'll take time, but I increasingly see a smooth road ahead. 

Either way, for me it doesn't matter if EMI, Sony and Warner don't licence Virgin Media's all-you-can-eat service and, in fact, I'd rather they didn't.

--------------------------------------------------

STUFF I DID THIS WEEK
This Wednesday saw me having my now traditional pre-Christmas visit to Brighton to deliver my three careers seminars - on the music, media and PR industries - at Sussex University. I do these partly because I'm a loving, sharing sort of guy, always keen to help students plan their careers, and partly to get the word out about ThreeWeeks in Brighton, and the student reviewer programme we run.

I revamped all three presentations this time, the PR one in particular, and they all seemed to go down rather well, which was nice. If you're interested, you can download my Powerpoint slides on the Creative Student website here. Plus there's information on the ThreeWeeks student review programmes here. Sorted.

--------------------------------------------------

STUFF I WROTE THIS WEEK
A round up of some of the news stories and articles I wrote for UnLimited's media in the last seven days...

--

MUSIC BUSINESS STUFF...

Music makes you an alcoholic says PRS [CMU Daily 07/12/09]

Duke Special pledges [CMU Daily 08/12/09]

Live Nation criticise commission merger ruling [CMU Daily 08/12/09]

MAMA board knock back takeover bid [CMU Daily 09/12/09]

HMV appoint new online marketing head [CMU Daily 10/12/09]

HMV to bid for MAMA Group? [CMU Daily 11/12/09]

--

COPYRIGHT STUFF...

Judge reaffirms Tenenbaum ruling, but gives tips to any appeal lawyer [CMU Daily 08/12/09]

IFPI Sweden activate the IPRED [CMU Daily 09/12/09]

Canadian majors sued for six billion [CMU Daily 09/12/09]

A load more Pirate Bay: Loads of appeals in Sweden [CMU Daily 10/12/09]

...None in the Netherlands [CMU Daily 10/12/09]

--

DIGITAL STUFF...

Apple close to buying Lala.com [CMU Daily 07/12/09]

Apple buys Lala [CMU Daily 08/12/09]

EMI sign up to Vevo [CMU Daily 08/12/09]

MySpace confirm Imeem purchase - so Imeem closes [CMU Daily 09/12/09]

VEVO launches [CMU Daily 09/12/09]

EMI and IODA sign up to Guvera [CMU Daily 10/12/09]

Virgin's download service may offer a large plateful of music rather than all-you-can-eat [CMU Daily 10/12/09]

Midge Ure involved in latest new band site [CMU Daily 10/12/09]

Vevo falters - but could still be big news [CMU Daily 11/12/09]

Will iTunes sell downloads through the browser via Lala.com? [CMU Daily 11/12/09]

--

POP COURTS STUFF...

New York court overturns Death Row injunction [CMU Daily 09/12/09]

Former Fray manager counter-sues [CMU Daily 09/12/09]

Barker settles plane crash lawsuit [CMU Daily 09/12/09]

Activision countersue No Doubt over Band Hero [CMU Daily 11/12/09]

--

GENERAL MUSIC STUFF

Lil Wayne not dead [CMU Daily 07/12/09]

Chris Brown does the media circuit [CMU Daily 07/12/09]

Anka files for divorce [CMU Daily 08/12/09]

INXS plan new album with guest singers [CMU Daily 09/12/09]

Goulding wins critics' choice BRIT [CMU Daily 09/12/09]

Muppets challenge X-Factor for festive number one [CMU Daily 09/12/09]

Lil Wayne album delayed again [CMU Daily 11/12/09]

--

MEDIA STUFF...

Global rapped over iTunes-plugging chart show [CMU Daily 08/12/09]

Santa stream goes live on DAB [CMU Daily 10/12/09]

AOL and Time Warner divorce complete [CMU Daily 11/12/09]

Lots of people tuning into streaming music services [CMU Daily 11/12/09]

Everyone loves Wogan, even if he makes Chris Evans cry [CMU Daily 11/12/09]

Billboard sold [CMU Daily 11/12/09]