Virgin Scraps Legal P2P Music Plans After Labels Get Jitters

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imageimage 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

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Carl Lachmann

IS anyone surprised? Yet again the major labels live up their credo – BIG BUCKS NOW – we need to get paid, paid, paid, even when it looks extremely uncertain that consumers are willing to pay. Ergo – 95%+ of the music is downloaded illegally. What the labels need to work may not be so much finding out what modelös will work – they need to work on the infrastructure around compensations. Set that up in the right way, and leave the rest to the market and the entrepreneurs, and the money WILL come. Infrastrucuture you say, what IS the man talking about? Shoot me a mail and I'll be happy to elaborate…

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