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Updated Digital music firm PlayLouder and broadband outfit Bulldog have combined forces to launch what is billed as the "world’s first royalty paying ISP".

PlayLouder MSP (Music Service Provider) will license rights from music companies to allow its subscribers to download and stream music from other users of the service in a “walled garden” environment.

For a monthly subscription, PlayLouder MSP will provide a broadband Internet connection - from Bulldog - bundled with music services.

PlayLouder MSP has already secured backing and music from independent record labels XL Recordings, Beggars Group, V2 Music, PIAS Recordings and Ninja Tune. It has also secured licence agreements with MCPS-PRS, the licensing body that collects royalties on behalf of music publishers.

Technical trials of the service are due to begin this Saturday (November 1).

A full UK launch is scheduled to begin in the first quarter of next year.

Paul Sanders, a director of PlayLouder MSP and co-founder of Internet music company State 51, said the service will come in at a price "comparable" to competitive broadband services but with the bonus of legal access to a wide range of MP3 files. The service is likely to cost around £30 per month, he added.

By establishing a service that allows music fans to trade files legally (with fellow subscribers of PlayLouder at least), PlayLouder MSP hopes to "revolutionise the way consumers and the music industry look at online music distribution".

Subscribers will be able to trade music legally using their favourite file sharing application, while music companies will gain royalties for previously unlicensed and unlawful file sharing activity.

Sanders said he was "quietly confident" the venture will reach the 40,000 subscribers it estimates will sign up to PlayLouder MSP during its first year of operation. He believes many music fans irked by the "chaos and unreliability" of the underground file swapping scene came be tempted to embrace a legitimate service.

"We think the best way to persuade people to go legal is to build music services into the fabric of network, which we expect to prove popular especially with users who already understand the speed benefits broadband brings," Sanders told The Register.

The service will offer a guarantee of quality and authenticity by removing the 'spoofing', spam, and flooding which often bedevils unlicensed file-sharing networks.

On top of its ISP function, PlayLouder will provide services tailored to music fans such as radio streaming, exclusive webcasts from high profile live events, and a video jukebox. PlayLouder also hopes to offer money off CDs and cheap gig ticket offers as an additional benefit of subscribing to the service. ®

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