Virgin Scraps Plans for Legal P2P
January 26, 2009

" Record labels demanded that it prevent file-sharing between subscribers and non-suscribers.

It's being reported that UK ISP Virgin Media has decided to scrap it's tentatively dubbed "Virgin Music Unlimited" plan after last minute demands by major record labels that it block file-sharing with PCs not owned by subscribers to the service.

Virgin Media felt that it blocking file-sharing undermines the whole point of the service, which is to MONETIZE ILLEGAL FILE-SHARING.

The revolutionary service would have helped to monetize the 95% of music downloads that the IFP recently claimed it loses to illegal file-sharing every year. More importantly, it would have given the music industry a new revenue stream that it claims to be searching for in its quest to embrace the digital music age.

It's a big blow to Virgin Media since it reportedly spent a staggering eight figure sum developing the project, which was sadly just a few weeks away from launch.

In an off the record remark to The Register, a sony exec seemed to brush off the notion of a new revenue stream that risks them losing absolute control over the content in their vaults. He reiterated the point that according to the voluntary memorandum of understanding (MoU) ISPs are required to cooperate with the British Phonographic Industry (BPI) in combating illegal file-sharing or it risks legislation to forcing them to do so.

In others words, "thanks, but no thanks."

Virgin Media hasn't been the only trying to help out the music industry recently. Last week The Isle of Man proposed a 1 euro a month broadband connection tax with legalized P2P in return.

"Anybody can go on to the Internet and access anything," said the Isle of Man's e-business adviser Ron Berry. "What we're trying to do is legalize it and monetize it. Why would you bother to pirate anything if you could do it with the blessing of the rights holders?"

The reality in all of this is that the music industry has to compete with free these days, and if it isn't careful it won't have anybody left willing to pay for it. By getting started with a system like the one proposed by Virgin Media now it can capture the business of those few still willing.

Heaven forbid the music industry tries a new approach. Aren't they reminded with their daily sales reports that they're "strategy" just isn't working? "

Source: Virgin Scraps Plans for Legal P2P