Virgin Digital Folds

By Richard Menta 9/24/07

It was just a month ago that MTV announced it would close its year-old URGE digital music store and merged its efforts with Real's Rhapsody service. Now Virgin is announcing that it is closing its digital music service Virgin Digital.

The service stopped accepting new users last Friday. The service itself will shut down on October 19th according to Virgin's announcement. The big question of course is the issue of DRM. Usually when a service closes down DRM music tracks no longer can call home to regularly validate that the user is indeed the proper owner of those files. Without this ability the files stop playing and the purchase is rendered useless. It turns out that music purchased by Virgin Digital suffer that very affliction and users will need to take the time consuming effort of backing up each and every track and convert them to MP3 files to retain them. In its statement Virgin Digital said:

If you have purchased tracks from the service then we recommend that you back up your music files – Information about backing up and re-downloading your tracks

The demise of Virgin Digital is yet another example of the dominance of Apple's iTunes music store to the current digital music landscape. There is another issue here, one that will make it even harder for future services to attempt to compete with iTunes. Trust.

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As we detailed in our article regarding the demise of Google Video, when users learn that the music or movie files they purchased to keep can and do evaporate they lose trust in such services. We wrote:

As a consumer, if you purchase a digital movie file online only to have it unexpectedly repossessed you will probably think twice before ever buying any such download again. If you do consider it again it certainly will not be for the same price as before. Experience made these downloads worth far less to you. So what are feature films that can be revoked at any time worth in the market place? Content that was marketed to the consumer as something they keep, but in reality was just an extended rental with an undefined term of possession.

To some Google Video customers the value of a movie download dropped all the way down to zero. They decided they won't make that mistake again. Considering that they were part of the segment of the video viewing public who actively paid for movie downloads no statement could be more damning. As for the rest, they may buy, but they won't pay nearly as much....That's bad news for a movie industry trying to wean BitTorrent users away from file sharing.

Tracks purchased on iTunes have DRM, but they also have something else. Consumers trust iTunes will be around ten years from now. Not even a deep pocketed entity like Google could keep that promise. So what will it take for a new service to gain enough user trust? That's the legacy of DRM and why the major labels will continue to have a tough time weaning themselves away from Apple's control. It is also why they are experimenting with DRM-free tracks.

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