Universal Music, the world's largest record company, said Monday it would offer its catalog on Virgin Media's upcoming unlimited download service in return for the U.K. broadband provider agreeing to suspend service to people who persistently download tunes illegally.
The download service, the first of its kind for the music industry, would enable Virgin customers to stream and download as many tunes as they want for a monthly fee. Subscribers would be able to keep the music, which would be free of digital rights management software, and play the tunes on any device.
As part of the agreement, Virgin said it would take steps against online piracy. Customers who persist in downloading music illegally from file-sharing sites would have their Internet service suspended temporarily. Virgin said no customers would have their service shut down permanently, and promised not to take part in network monitoring or interception of customer traffic to identify offenders.
In order to encourage customers to download music legally, Virgin plans to implement education programs to discourage online piracy and to raise awareness of legal alternatives.
"In terms of both convenience and value, our new music service will be superior to anything that's available online today and provides a fair deal for both consumers and artists," Virgin chief executive Neil Berkett said.
Besides offering unlimited downloads, Virgin plans to offer an "entry level" service for customers who need less. The Internet service provider is negotiating with other major and independent record companies in the United Kingdom to make their catalogs available. Virgin, which has more than 7 million broadband customers, expects to launch the service this year. The company did not release pricing.
The deal reflects a new tactic in battling piracy that accounts for 95% of online music, according to industry estimates. The agreement is also in line with what the British government would like to see to control piracy.
Rather than have government oversee the suspension of Internet service, Britain would prefer to have copyright holders and ISPs work together in developing their own solutions.
"Government has a role in creating the right legal and regulatory framework for rights and copyright," said Stephen Carter, the British communications, technology, and broadcast minister, in a statement published by The New York Times. "However, the market will flourish through innovative commercial agreements between companies, and agreements such as this will help significantly in reducing any demand for piracy."
Entrepreneur Richard Branson holds a 6.5% stake in Virgin, which also produces and sells content through its cable TV network.
While online music services are available in the United States, there are no subscription services that allow for unlimited downloads to keep permanently for a monthly fee. Monthly subscriptions are available to stream music or to download tunes to mobile devices; however, downloaded music can no longer be played if a person drops his subscription.
Online music retailers, such as Amazon.com and Apple iTunes, do sell DRM-free music.
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