09/24/2007, 11:30am, EDT
Monday, September 24thVirgin shutters online music store
Virgin today announced that its online music store Virgin Digital is to shut down over the course of the next few weeks, signifying the end to the relatively short-lived attempt to compete in the direct download arena. While the company has already phased out its US service last year in a deal that saw customers transferred to Napster, UK customers will now have until September 28th to access the site without a subscription and will see a complete shutdown by October 19th. Anyone with a subscription in effect for longer than a month will receive a refund, though song credits will expire at the store if left unused, Virgin said.
The closure of the store, which opened in September 2005, is the latest in a string of mergers and shutdowns to take place in recent weeks triggered by poor sales. MTV began the trend in late August by closing the stand-alone version of its heavily promoted URGE service in favor of a deal with RealNetworks' Rhapsody store and was quickly followed by Sony, which axed its Connect store after years of unsuccessfully promoting its proprietary ATRAC format. Virgin did not comment on its reasons for discontinuing its service but is believed to have wrestled with poor sales.
Virgin Digital's demise also represents an apparent consolidation of the market that shifts the balance of the digital music market in favor of Apple's iTunes Store and away from Microsoft's Windows Media standard, which had been used by the defunct Virgin store as well as URGE. Apple has typically enjoyed dominance of online music in North America but has frequently held only a small lead over rivals in Europe.
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Personally, I can see renting movies and tv shows, but I would never want to rent music. Is there a market for this? If so, should Apple consider offering this for those users? I would say yes if that's what enough customers want. I think Apple's goal is to drive more iPod sales and if both selling and renting does that, go for it.
I think the consumers have made their intentions known - they want to OWN the content they pay for, they want a consistent pricing scheme, they want it available on their iPods and they want minimally-invasive (or better yet, none) DRM.
Go ahead, Universal. Try to get people to buy your shows and music while forcing them to enjoy the content ONLY whilst seated at their Windows PC with Internet Explorer 6.0 in a 24 hour time period for $4.99 per unit.
I wish you the best of luck. Pardon me while I spend my money with someone else.
2) Subscription models will never work for music because music is highly portable and repeatedly consumable. That is, you can listen to music almost anywhere but watching a film requires at the very minimum your concentration plus a screen. Your video iPod is suitable (just barely) but you can't watch that tiny screen while working out for instance but you sure can listen to tunes.
"Repeatedly consumable" means you can listen to music over and over again - it's worth it to own it, just like it's worth it to own your house if you don't plan on moving. On the other hand, there are very few films that anyone can watch repeatedly. It takes longer to watch films and usually once is enough. Therefore it's worth it to rent or subscribe to Netflix, just like if you're going on vacation you rent a (hotel) room, or if it's a place you visit regularly but not year-round you time-share or rent. Not a perfect analogy but I think you get my drift.