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Virgin to Offer Downloads of Singles

September 09, 2003|From Reuters

Virgin Megastores said Monday that it would turn to the Internet to resuscitate demand for the downtrodden music single by introducing Europe's cheapest music download service yet.

Sales of music singles have been in a tailspin recently. Music company executives blame the rise of online file-trading sites such as Limewire and iMesh, where new tracks become available free as soon as they hit the radio airwaves.

The British recording industry last month reported that single sales fell by 26% year-on-year in both sales volume and value in the year ended in June as competition from CD burning and file sharing continue to sink sales.

Virgin hopes to lure Internet users away from free, and illegal, services with exclusive tracks and a pricing plan that undercuts the competition.

It will charge as little as 95 cents for a song download, undercutting by 20% the next-cheapest rivals, Microsoft Corp.'s MSN and European Internet service provider Tiscali.

And, starting next week, Virgin will offer digital downloads before the store release date.

"Our new service will be instrumental in putting the British single firmly on the road to recovery," said Richard Branson, chairman of parent company Virgin Group.

Virgin has adopted pricing that reflects the more straightforward "pay as you go" model popularized by the mobile phone industry.

Most rival services favor charging monthly subscriptions, a formula that has failed to attract customers en masse because subscriptions are considered to be too complicated and too expensive.

"The legal services have got to offer better quality if they have any chance of competing with free," said Ian Heath, head of business development at Virgin Megastores.

Virgin also secured exclusive music downloads from BMG artists Avril Levigne, Electric Soft Parade and Cooper Temple Clause.

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