Sky, the U.K.’s leading pay-TV provider, is entering the digital music marketplace with an adventurous service which allows subscribers unlimited access to downloads and streams.
Universal Music Group International’s U.K. affiliate, itself the top player in the market, has struck an arrangement making it the first content partner for the online music service, which is to roll out to consumers in the U.K. and Ireland later this year.
At launch, Universal’s entire catalog will be available through the as-yet unnamed download store, where all titles will be offered in the MP3 format via a range of subscription options.
Subscription will enable customers unlimited streamed tracks, and a set number of download-to-keep titles.
A line-up of top executives from both parties were on hand at meeting this morning at UMGI’s London headquarters, where details were disclosed to a select gathering of reporters. Although price points and an official start date have yet to revealed, one discussion thread was repeatedly made loud and clear — that the Sky service represented an important building block for the legitimate download market.
UMGI chairman/CEO Lucian Grainge described the venture as “quite a courageous business proposition,” which should ultimately help revive the wider music industry. “This is part of our attack [on illegal downloading], coupled with our defence and our creative as well as business approach,” he says. “Rather than tell people what they can’t do, with great heart and vigour, we can remind them and convince them of what they can do, and what the opportunities, and what is legitimate and what is sexy and what is good value.”
Grainge added, “I believe absolutely at this moment that music is at its peak of awareness and importance. This arrangement is a great opportunity for us to grow the music market. I hope everybody in their own section will have an enormous market-share and enormous penetration.
He quipped, “We’re making the cake multi-tiered. And more fattening for everybody.”
Where Sky lacks a history in music, the media group can certainly boast an impressive reach into the U.K. public. Its multi-channel TV service counts 8.9 million subscriptions, a figure which translates to about 21 million viewers, or one-third of the population, and the company also operates one of the fastest growing broadband services in the country. Naturally, Sky intends to apply its clout in the home entertainment market to muscling-up its music offering.
UMGI has acquired a stake in the new venture, terms for which were not revealed. Executives from Sky confirmed that talks were ongoing with other music companies to take part in the offering.
Speaking to Billboard.biz, BSkyB COO Mike Darcey says the company has no plans to challenge the iTunes Music Store for its market-leading status in the download space. Its goal is somewhat grander. “We think that the market is very under-penetrated. We think there is a lot more demand which hasn’t been particularly well met,” he says. “This is not about knocking iTunes off the No. 1 spot or anything like that. I think the music industry is a pretty big industry, there’s a lot of money in it. We are convinced there is an awful amount of unmet demand in music.”
