Virgin to launch music service
2004-09-28 14:03
New York - British tycoon Richard Branson's Virgin Group said on Monday it was jumping into the market for online music, with a "Digital Megastore" offering US customers song downloads for 99 cents.
The move pits the British magnate's company against the popular Apple iTunes music service, Microsoft's MSN and others offering pay-per-download.
Virgin said it would offer more than one million songs on its site and would be selling at least 50 portable music players.
"Virgin stands for innovation, fun, and an absolute dedication to customer value," said Branson in a statement.
"We worked directly with passionate music fans around the world and together we've come up with a digital music service that truly defines the Virgin energy and spirit. It's time for a digital music revolution."
The venture is a new challenge for Branson, the tycoon who made his initial fortune in the record industry, heads Virgin Atlantic airlines and has also launched a string of other companies in sectors such as railways, mobile phones, internet access and soft drinks.
Virgin also will offer a subscription-based service, called Digital Music Club, for $7.99 per month, allowing unlimited access to its library, and a streaming music and radio service.
This offers a lower price than some rivals for this type of service, which would allow users to listen to an unlimited amount of music from their computers but not transfer to CDs or other devices.
"They will have the challenge of educating the customers and make it clear that you don't own your songs if you stop paying your bills," said Gartner analyst Mike McGuire.
Branson's venture is a relative latecomer to the burgeoning market for online music downloads.
Apple became a quick market leader last year when it launched its iTunes services, aiming to offer a legal alternative to song-swapping, which has spawned legal action from the music industry.
Apple says it has sold 125 million song downloads and has a 70% market share of the legal digital music market.
Another major player is Napster, which was initially a file-swapping service until forced into bankruptcy by lawsuits, and then was purchased and transformed into a fee-based service.
Wal-Mart, Sony and RealNetworks also offer similar services, and Yahoo is widely expected to launch one soon.