Virgin Digital Closes US-Based Music Subscription Service
Posted January 6, 2007
Virgin Digital has now exited the US market, according to an email sent to subscribers over the holidays. The subscription service entered the market in September, 2004, though it has largely flown under-the-radar since. Apple has remained the dominant player, though rivals Napster, eMusic and Rhapsody have also grabbed significant Virgin Digitalmindshare. In that environment, Virgin Digital exited quietly and with little fanfare, a casualty of a very tough online music market. As part of its departure, Napster has agreed to assume remaining Virgin subscribers and honor purchased downloads, though it remains unclear just how substantial the transitioning crowd actually is. Virgin Digital will remain an active service in the UK.
Virgin Digital faced a number of executive departures prior to its shutdown, and the latest development is unsurprising to those close to the company. Despite the internal turmoil, the utter dominance of the iTunes Store within the online music arena placed heavy pressure on Virgin . Estimates vary, though Apple commands greater than three-fourths of all paid downloads, partly because of its closed iPod+iTunes architecture. Outside of eMusic, which brokers in open MP3s from independent artists, most paid download services deliver WMA-protected tracks, a format that precludes iPod compatibility. That situation has been exacerbated by a rather dysfunctional PlaysForSure network, a once-promising coalition of stores, player manufacturers, and Microsoft. Adding to the pressure is a still maturing subscription-based sector, a delivery method that is struggling to grab meaningful market share.
http://www.digitalmusicnews.com/stories/010407virgin/view
