• by September 27, 2004

And, another company will enter the music download business. UK-based Virgin Group will launch VirginDigital.com, making more than one million tracks available for download for 99 cents each directly from its Virgin Digital Megastore.

But there's a twist. Virgin says it will also offer monthly subscriptions. That means music fans can listen to an unlimited number of songs for a flat monthly fee. The catch is that the music can't be transferred to portable MP3 players, although Virgin says a premium subscription track will launch soon that will enable the transfer. Pretty interesting upselling strategy.

Virgin will charge $7.99 a month for the subscription music service, 20 percent less than the $9.95 a month that RealNetworks and Napster charge for similar services. Yahoo!, which acquired Musicmatch this month, and Microsoft's MSN don't yet offer subscription options. Both Yahoo! and MSN, as well as Apple's iTunes Music Store, charge 99 cents apiece for individual songs. Wal-Mart, which offers its own download service, charges 79 cents per track.

Jupiter Research estimates that 2.1 million people pay for music subscription services, including Internet radio services.