September 26, 2004 9:00 PM PDT

Virgin launches online music service

Virgin Digital, the online arm of the Virgin Group, will launch an online music service Monday aimed at replicating on the Net the success of its offline chain of retail music stores.

The company is jumping into the market with a full-featured music jukebox written from scratch, in which it is offering a music download store and music subscription service powered by wholesaler MusicNet.

With an entry 18 months after Apple Computer first launched its iTunes song store, Virgin is starting well behind its biggest rivals. But the company says it can use the powerful Virgin Megastore brand--and the access to the millions of customers who shop at the stores every year--as a way to reach out to mainstream consumers more effectively than competitors can.

"We wanted to look at feature sets that (are) actively represented (when) walking around a Virgin store," Virgin Digital President Zack Zalon said. "(Our rivals) are technology companies developing music services. We are a music company developing technology. We look at things differently."

With the move, Virgin becomes the first major offline music retailer to enter the market now dominated by software, hardware and consumer electronics businesses. As such, it could help test the viability of the bridge--if there is one--between the old offline world of music selling and the new digital medium.

Big record retailers have watched with trepidation as the online music market has developed. They saw the rise of Napster and other file-swapping services as a threat to their core CD business--but then saw the moves of record labels to create their own digital song distribution services in 2001 as another threat.

In 2003, a coalition of big music stores joined to create a kind of digital music co-op, jointly supporting a venture called Echo Networks that they all would use to power their own online ventures. That project fell apart early this year, however, when it became clear that other options might be cheaper than Echo.

Zalon said the Virgin service had been built in part after months of informal interviews with Virgin Megastore customers, aimed at discovering what mainstream music listeners liked and disliked about the existing online music products.

What the company found is that few customers actually used any of the legal music services, Zalon said. Many complained that the services were confusing or that they didn't know how to find songs on their computers, among other problems. The lesson Virgin drew was to create a new jukebox from the ground up without relying too heavily on Windows interface conventions or other services' practices, Zalon said.

In truth, the player and products will be familiar to anyone who's spent much time with digital music, although there are slight interface differences.

The store sells downloads in a high-quality, copy-protected Windows Media format. The "Virgin Music Club" service offers unlimited streams and "tethered" downloads that are locked to the computer for a price of $7.99 a month--$2 cheaper than the parallel subscription offers from RealNetworks and Napster.

The company has spent considerable time building artist information, reviews, biographies and discographies into the system, all of which are linked to one another so that a listener might browse through related artists and genres as though flipping through stacks at a real music store, Zalon said.

Analysts said Virgin would not have an easy task ahead of it in gaining market share but that the financial and brand backing of the Megastores would help.

"It's a crowded market, but there is certainly opportunity here," said Mike Goodman, an analyst at The Yankee Group. "There's already a certain level of name recognition, and they'll also have the backing of Virgin, which, from a financial perspective, is very significant. That will give them the ability to sustain losses while they grow the company."

The Virgin Group, which offers cell phone service in the United States, Britain and elsewhere, has also recently branched into a consumer electronics business that includes MP3 players. Both businesses are expected to be linked to the music store eventually.

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A fascinating and largely decent first stab at it
I just downloaded the app and signed up for a subscription with Virgin's new service.

My quick thoughts:

- Why a separate app? I would have rather had their app folded into Windows Media Player, or done via a rich DHTML Web app.

- Being able to download music is great! Super-handy for laptop users, and also nice to be able to access one's music using different (preferred) music players.

- The Radio is still VERY rough around the edges.

- Searching and navigation is more iTunes than Napster-like. That's good or bad depending upon your preferences. Some good functionality over all, but also some annoying quirks.

- The messaging (signup text, docs, etc.) is all rather fluffy but amusing, engaging, and informative. I like how Virgin is very up front about what you get for $7.99 a month.

- Overall, it's a pretty usable service, and an excellent value for $7.99 a month. I strongly recommend everyone to give it a shot via the trial.

- With that said, Napster's "Napster to Go" (unlimited music rentals movable to supported music portables) for $15/month is hands-down the best option for those with non-iPod portables nowadays. Get in on the beta if you can!!!

Regards,
Adam
<a class="jive-link-external" href="http://www.bladam.com/" target="_newWindow">http://www.bladam.com/</a>
and <a class="jive-link-external" href="http://www.lasnik.net/" target="_newWindow">http://www.lasnik.net/</a>
Posted by ThatAdamGuy (21 comments )
Reply Link Flag
Clueless
The Key to iTunes success and everybody else's failure is that iTunes lets you buy individual songs. Who wants a subscription? It was the same with mobile phones, they didn't take off until the pay-as-you-go option was introduced.

Why would you build up a future comittment on something you may or may not want? We've never bought our music that way and we aren't about to change.

My predictions: (1)if Virgin sticks to it's subscription format it will fail. (2) iTunes will continue to succeed, (3) the next serious player that offers pay-as-you-go will take the number two slot
Posted by (10 comments )
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RE: Clueless
I totally agree. I checked out their FAQs, sounds pretty lame to me. You can purchase some with limited use (check out FAQ#7) or do the Club and never own the songs, just use it as long as you have a subscription (FAQ#8). People buy songs and portable devices to have their favorite music playing with them "to go" wherever they are at whatever moment they want to play it.

<a class="jive-link-external" href="http://virgindigital.com/faq.html" target="_newWindow">http://virgindigital.com/faq.html</a>
Posted by Juan Del Pueblo (1 comment )
Link Flag
Virgin Digital 'Megastore'
Hey Paul...

Just to let you know, we have a complete a-la-carte store in the software that you can use for absolutley free (sort of like iTunes, but supporting WMA devices). We have over 1M tracks, all in excellent quality.

We like all models of digital music, and have packed a lot of power into the service, with the ability to buy, or subscribe, or listen to some great free radio.

Hope you enjoy it... thanks...
Posted by (2 comments )
Link Flag
virgin online store
history shows that online shoppers don't necessarily want to
replicate the physical store experience online. efforts by tower,
best buy, hastings, wherehouse and many others have generally
ended in failure. this was largely due to a complex and
frustrating user experience. the writer says little about that
aspect of the virgin store. until someone can replicate and
improve on the one click purchase (and invisible licensing)
itunes will continue with its dominant position in the realm
Posted by kosmo fenster (4 comments )
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Hopefully easier to use?
Thanks for the comment. We've taken a different approach with Virgin Digital, where we do in fact allow people to select the kind of 'checkout' experience that they want. We're trying to offer consumers a very personalized shopping experience. Check it out yourself and please let us know what you think...

Thanks...
Posted by (2 comments )
Link Flag
I've been a subscription service listener for a few months now...
I've been a subscription service listener -- using MusicMatch's new On Demand [not to be confused with their *old* kinda clunky Artist On Demand service] for a few months and I *really* like it.

Now, I have about 1200 vinyl LPs, 600+ CDs, and 19,000 or so Mp3s (99.9% legit, mind you).

But it's [i]much[/i] easier and faster loading up tracks from the MM listings than using CD's or even MP3s. If I want an artist, album, or track title, I just type it and, usually, boom there it is. (Best on mainstream, iffy at the obscure or underground edges of the musical culture, still, not bad overall. But anyone with MM ver 10 can browse their stacks and listen to 30 sec clips which is a great way to get a feel for it.)

Now, all those nice things said, I'm not so sure about the Virgin take on subscription.

One of the things I like best about MMOD is that I can use it from any broadband PC with MusicMatch v10 on it. So, from my desk, from my laptop in the front room or down at the coffee house free hotspot, or at friends houses. All I need is my user name and password. (It only works from one machine at a time, of course.)

Of course, you do have to be online, which you apparently don't need if you're using the Virgin service.

But unlikes someone above, under the Virgin scrip, I don't think you can move your 'temporary' downloads to another device. I *think* you have to *buy* the track for a buck to be able to put it on a portable, etc.

But I don't really know, and it seems like that's a marketing problem for Virgin.

I REALLY HATE services or products that won't even tell you basic facts about how they work unless you sign up for some potentially binding "free demo" that will turn into a paid subscription committment if you don't cancel it in time.

MusicMatch On Demand is pretty cool (as long as Yahoo, who just bought MM doesn't screw it up). If you're looking at Virgin -- you might want to give MMOD a good look, too. (And you can do it without even the free trial. Just get MM v10 and click the On Demand button. You'll be able to search, browse, and play -- but only the firsts 30 seconds. But that should be enough to get the feel.)
Posted by dogmo1001 (40 comments )
Reply Link Flag
Horrendous interface
The collection that Virgin has is good and the radio channels have great content, but the interface is horrendously bad, compared both to iTunes and even Rhapsody. I might keep the service to listen to their radio, but I would never buy music through their interface - it is very discouraging. And the player is slow as Christmas too (on my P4-2.4 with 512MB Ram and 10000RPM WD Raptor disk !!!!)
Posted by behemot (4 comments )
Reply Link Flag
Not as good as Rhapsody - Yet
The music selection is very good, as good or perhaps a bit better than Rhapsody's. I like the download feature (a la Napster) and the mostly-complete albums available for download or streaming (a la Rhapsody -- Napster has too many incomplete albums). I also like the built-in equalizer, which Rhapsody doesn't offer, but clearly it would be better to be able to access the music through a real player like WMP or Media Jukebox.

The bad news: not ready for prime time yet:
1) very resource intensive. My cpu usage runs 20-60 % with VirginDigital vs 2-10% for Rhapsody (even when VD --cute acronym for Virgin eh? is idling, playing nothing!). I suspect some bugs in the app or resource leaks that hopefully can be cleaned up. Closing the app shows a memory error message box in my XP. Most importantly, the music stutters when doing other things in Windows, like moving a dialog box or opening another app. This never (almost never) happens with Rhapsody. Very slow to load songs too (I thought it had frozen a few times.) The application has no picture icon on my system either, just the empty Windows icon.
2) Terrible GUI.
-a- Albums should list the track numbers and sort in order. Try downloading an album, clicking the song title column and then try to get the album back in order! The track number should be part of the downloaded filename in my opinion too.
-b- Type in a name to search and too many extraneous matches are shown.
-c- When it shows a list of albums by an artist, it mixes in compilations with no sorting. Rhapsody lists Main Albums followed by Compilations and Singles. I want the experience of "buying an album" when I look at artists. So I need main albums with track numbers clearly identified.
-d- The interface should show the available and unavailable tracks/albums for all items all the time. Now you have to click Show All and it reverts immediately on the next click of anything to Show Available. Rhapsody dims the unavailable ones, either albums or individual tracks. Napster tries to hide unavailable tracks by omitting them , but at least you can see the track number skip (unless the final track is missing). This kind of dishonesty or lack of information just about kills it for me.
-e- The ability to mix personal, purchased, downloaded, and streamed music is good, but not well executed. * My display corrupts when switching back and forth. ** The list is of all tracks with no collapsible/sortable hierarchy by genre or album, and again no track numbers to order the albums for playback. *** Unclear how to easily save "stream only" items. In Rhapsody I click "Save to Library", here only "Download" is a clear option.
-f- I'd like to see more buffering for smoother playback. Is the song downloaded entirely (as in rhapsody where you can see the progress meter move across the screen until the song is completely downloaded, so gaps in playback are eliminated)? Can't tell what's going on from the interface.
3) Give us more information
Finally, quality of the music is important. It sounds as good as Rhapsody (when not stuttering), if not slightly better. I'd like to know:
a) what is the streaming bitrate/format for
radio, for streaming, and for downloads? Is it always wma? is it vbr or fixed rate? What rates? I do like the option to pick high quality for burning and ripping (192), but mostly I stream. In Napster (a few months back at least) streams were at 96 and downloads at 128, making downloads the preferred format, but not as convenient as immediately streaming. So what's going on with Virgin Digital in these regards?

I hope the bugs are all worked out, because it's cheaper than Rhapsody, combines downloading and streaming in a better package than Napster, adds a graphics equalizer for a modicum of player amenity, and has a very good selection of music. But I don't know if I will keep this subscription beyond the trial. I will probably cancel and keep Rhapsody until/if the GUI and bugs are worked out with Virgin.
Posted by cphilips2 (1 comment )
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