Seven months after Universal Music signed up to Virgin Media's proposed all-you-can-eat MP3 service, the UMG exec behind the U.K. deal admitted there was a "philosophical debate" in the biz about the meaning of unlimited downloads.
Virgin Media, the U.K. cable TV company and Internet Service Provider, announced the service in June 2009 and Universal was the first label on board. Since then, it has missed its proposed launch date of Q4 2009 and has failed to announce any new label partners, although a Virgin Media spokeswoman tells Billboard.biz that it is "in talks with both major and independent labels to launch a comprehensive service."
It will be for Virgin Media customers and will offer streaming and downloading for a subscription - but there is no confirmation of any cap on the "unlimited" service, or whether it is called MusicFish as reported by Marketing magazine.
Speaking at the launch of the IFPI's Digital Music Report in London today (Jan. 21), Rob Wells, SVP, digital at Universal Music Group International conceded that the service could be different to its original proposition when it does launch.
"They went into a deal with us and then assumed that everyone would follow quite quickly - and that was an incorrect assumption," he said. "I think you will see the service go live in the next few months."
Wells suggested that as he had already cut a deal, it was for other labels to outline their position. Sitting alongside him in the IFPI's offices in Piccadilly, Eric Daugan, SVP, digital business, Warner Music EMEA (Europe, Middle East and Africa), said that the Virgin Media proposal "was a transformative deal" and "very progressive."
But he did not sound ready to sign up to an unlimited MP3 offer. "There are different consumers out there and it [unlimited] may not be the best proposition anyway," said Daugan, who pointed out that average consumption is a few albums a year per person.
Asked if it would still be a genuinely unlimited service, Wells responded: "I honestly don't know. The deal we did with Virgin [Media] was for an unlimited MP3 service, the deals Virgin are cutting with other majors I couldn't possibly comment."
Any attempt to have different allowances on the number of downloads permitted from different companies would be "difficult to administer - although not impossible - [and] I think it would also provide a very disjointed consumer experience," said Wells.
He added: "There's a philosophical debate raging throughout the entire industry, and particularly within the halls of power in the major labels, in terms of what an unlimited offer actually will mean to a consumer."
Wells pointed out that it has partnered with Korean service Soribada for a few years on an all-you-can-eat MP3 subscription offer, which led to a reevaluation of the meaning of unlimited.
"The levels of consumptions, after a period of three or four months of gluttony, they level out at around 35 tracks a month," he said. "So 'unlimited' through our research equals around 35 tracks a month."
He also stressed that the Virgin Media deal was aimed at offering a legal alternative to peer-to-peer users and that it would provide a long-term revenue stream for UMG.
"The Virgin Media deal may well be an unlimited offer but it also includes a 12-month contract," said Wells. "That guarantees us a revenue stream for that period of time."
But there were some signs of frustration with the other labels, who may not want to follow Universal's lead.
"Unlimited MP3 is what consumers have on illegal services," said Wells. "Universal doesn't believe it will cannibalize either existing digital services or indeed our CD service. This is a direct attempt to convert habitual pirates. Other partners that Virgin [Media] are looking to try and pull in view this as something that could potentially cannibalize existing revenue, and we have a different view."