Virgin Media and Universal launch music service

LONDON -- Virgin Media, the cable TV operator owned by entrepreneur Richard Branson, launched a new kind of music download subscription service Monday with Universal, the world's largest music company.

The service, described by the companies as a world first, will allow Virgin Media's broadband customers in Britain to stream and download as many songs and albums as they like from Universal's catalog for a fee.

But entertainment lawyers said the service was unlikely to solve the global music industry's problem of billions of dollars lost to music piracy, and would need to offer content from big-name entertainers to be attractive to consumers.

Universal, by far the biggest industry player, has a roster of talent that includes U2, Elton John, the Rolling Stones, Amy Winehouse, Duffy and James Morrison.

Virgin said it was continuing talks with other British major and independent music labels and publishers about including their artists in the new service.

The music will be available to download in an MP3 format, giving buyers the ability to listen on a range of devices, including iPods, mobile phones and PCs as well as other MP3 players.

The subscription service, due to be available later this year, builds on mobile phone unlimited download services such as Nokia's "Comes With Music," — allowing for a massive range of music to be downloaded — as the industry fights a losing battle against illegal downloading.

Revenue from digital music sales rose 25% last year to $3.7 billion, according to the International Federation of the Phonographic Industry. But those legitimate music sales did not come close to offsetting the billions of dollars being lost to music piracy — an estimated 95% of music downloads are still unauthorized.

IFPI Chairman John Kennedy said the new Virgin-Universal deal was "the kind of partnership" between a music company and an internet service provider (ISP) that he expects to shape the future of the music business internationally.