Virgin Media, UMG Partner On Digital Music Venture

ipod silohuettesVirgin Media has struck an agreement with Universal Music Group to launch a new digital music service offering DRM-free unlimited downloads for any MP3-compatible devices including Apple's iPod and iPhone.

The new service will allow UK consumers to stream and download as many tracks and albums from the Universal catalog as they want, in return for a "great-value" monthly subscription fee. The monthly cost hasn't been specified yet, but the companies said an entry level offer would be extended to customers who download music regularly but might not want an unlimited service.

Users will be able to keep downloaded music permanently. Virgin Media, a sister company of Virgin Mobile USA, said it's also talking with other major and independent music labels and publishers in the U.K. to offer as broad a music selection as possible when it launches later this year. Universal's catalog includes artists such as U2 and Amy Winehouse.

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Universal has already signed on with other mobile music services including Nokia's competing "Comes With Music" service, which allows users to buy a year's worth of unlimited downloads on Nokia devices bundled with its Ovi mobile Web platform.

Research released by eMarketer Monday predicts U.S. spending on music via mobile devices to fall by 5.6% this year. "Online will experience healthy growth, mobile will trend slightly downward and physical will continue to plummet at accelerating rates," said senior analyst Paul Verna, in a statement. "Unfortunately, the sum of online and mobile will not compensate for losses in physical, but it will slow down the rate of those losses to a 2.9% drop in 2013."

The eMarketer report highlighted the nexus between music and social media, citing the success of free music streaming service Pandora's iPhone app. It had more than 4 million users as of May, and some 20% of the 1 million songs downloaded per month through affiliate links were from Pandora's iPhone app.

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