Can Virgin Media crack the scourge of piracy with a new music download service?

The cable provider plans to offer customers unlimited streaming and downloading of MP3 music files in conjunction with the world’s largest music company, Universal, home to artists ranging from U2 to Lady Gaga and Willie Nelson. The service, which may be launched by the end of the year, could eventually include music from other major labels.

The idea is to drive back the tidal wave of online piracy, which could appeal to parents worried that their children are downloading contraband music. More than a decade after Napster made a splash by making it easy for users to download music for free, other systems still exist that give Web surfers the same power. Many of those illegally acquired songs are downloaded over cable providers’ systems.

So would you pay $16 to $24, about the cost of two new albums, for a month of unlimited access to music?

Keep an eye on:

• These days, smaller is better in radio (The Wall Street Journal)
• Even Forbes Magazine is pinching pennies (The New York Times)
• BusinessWeek prepares another site redesign (PaidContent.org)

(Photo: Reuters)

The big dog in the music pound, Universal Music Group, says rather than feeling sorry for itself as the music industry’s woes spiral out of control, it has managed to have a good 2008 so far.

Universal’s parent, Vivendi, the French telecoms and media conglomerate, said on Thursday that the world’s largest music company had actually grown revenue by 3.5 percent in the first nine months of 2008 on a constant currency basis to 3.14 billion euros. Though this is a 3.8 percent decline in actual currency.

The company was boosted by growth in music publishing and merchandising following the acquisitions of BMG Music Publishing and Sanctuary in 2007. The company also highlighted a 33 percent increase at constant currency in digital sales and higher license income.  These all helped offset tumbling CD sales, says Universal.

The stars were the latest British blue-eyed soulstress Duffy, the Mamma Mia! soundtrack, new releases from Lil’ Wayne (pictured left) and Jack Johnson as well as carryover titles from Amy Winehouse and Rihanna.

Universal’s earnings before interest, tax and amortization rose 22 percent to 408 million euros boosted by the inclusion of BMG Music Publishing in the results, as well as credits from the downward valuation of compensation schemes linked to equity value and increased license income.

(Photo: Reuters)

They say success has many fathers, and nowhere is that ever more evident than in the music business, where aging executives still argue over who first spotted the rasping rick-rolling talent that is Rick ‘Never Gonna Give You Up’ Astley in a smoky London bar.

One talent everyone loves talking about, though not much about her music recently, is Amy Winehouse. In fact, two separate executives who’ve taken the top job at different companies both claimed to have signed the five-time Grammy Award-winning bad girl, according to press releases that landed in our inboxes this morning.

Nick Gatfield is joining EMI Music as president of A&R Labels, North America and UK. According to EMI’s release he joined from Universal Music where he had been president of Universal Island Records Group since 2001:

“As well as signing five times Grammy Award winner Amy Winehouse, who has sold close to nine million copies of her ‘Back to Black’ album, Gatfield has also overseen the recording careers of Keane, Mika, The Fratellis, McFly, Busted, Sugababes, The Feeling and new artists Robyn and Sam Sparro.”

The next email in our inbox was a press release from Universal Music Group announcing the promotion of Darcus Beese and Ted Cockle as co-presidents of Island Records Group. Again the press release:

“Darcus Beese steps up after 15 years with Island, latterly as one of the industry’s most respected Directors of A&R. In 2003 he signed Amy Winehouse, now widely acknowledged as one of the world’s most talented artists. A year earlier, he signed Sugababes and strategised their reinvention, to make them one of Britain’s most successful and enduring girl groups.”

So who signed Winehouse? To be honest it doesn’t matter much to Universal Music Group International’s top boss Lucian Grange. He’s more concerned about Amy ending up ‘otherwise engaged’ one time too many according to reports.

(Photo: Reuters)

MySpace has sent out a ‘breaking news’ media advisory for a news conference featuring CEO Chris de Wolfe (left) at 11am ET, which we presume is about the launch of MySpace Music as Reuters reported yesterday to be coming in days.

Silicon Alley Insider reported later yesterday that Universal Music Group had settled with MySpace for $100 million, a figure we also confirmed from our source. The November 2006 lawsuit was the main sticking point for getting MySpace Music off to a flying start. With a third of the recorded music market under its thumb, Universal’s participation was seen as critical to the new service’s success.

MySpace’s parent News Corp. will own the majority stake of MySpace Music while Universal Music Group, Sony BMG Music Entertainment and Warner Music Group will each have a minority stake proportional to their market size, say our sources. The music companies also have an eye on a possible spin-off of the music company in the future, said one source.

No one knows if EMI, the smallest of the big four, will be on board in the future. This week the company appointed former Google executive Doug Merrill as president of digital.

Keep any eye on:

• Jay-Z does $150 million deal with Live Nation - NY Times, WSJ and Silicon Alley Insider
• The iPhone shortage - NY Times, Reuters
• Garmin to cut costs in 2008 - Reuters