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Sky first to sign?

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British ISP Sky is believed to be the first network to sign with Omnifone as the media giant revamps its music plans, reports suggest.

Sources confirm the reports are accurate, and a deal has been signed, but Omnifone Rob Lewis could only say they're in "advanced negotiations" today.

Last year, Sky announced a streaming service with Universal Music - the world's biggest record company - as a spoiler to the much anticipated Virgin P2P service which was due to be launched this spring, but which has since been put on hold. Omnifone gives the ISP more choice and service experience: it has deals with all four majors, and a couple of years' experience of running the mobile/desktop version of its music service in several territories.

Omnifone has put together a "shrink wrap" version for ISPs, which includes a streaming offering and downloads. Speaking from Mobile World Congress in Barcelona, Lewis told us it's designed for the mass market "older than iPod generation" demographic, which primarily listens to music at home or in the car. The car part is delivered via HSDPA high-speed 3G.

The offerings may also attract ISPs with a TV service, Lewis said, as Omnifone can stream music through a set top box.

"ISPs needs a solid solution that's not just desktop bound. With more and more connected boxes the service can be radically different from P2P. You can't do that today unless you've got a Dell PC in your living room, for example."

No strings attached?

The "unlimited" portion refers to streaming and DRM tracks. A certain number of DRM-free tracks are included for free, and this allowance can be increased.

"We've been far too focussed on mobile music," said Lewis. "Most of us when we listen to music are at home with friends or in the car, we need a proper digital music experience there or we'll continue to use CDs. This is designed for mass market that doesn't listen to music on the bus."

Omnifone announced its MusicStation service two years ago and went live exclusively with Vodafone later that year. But the exclusivity means means it's reliant on the operator for consumer marketing and visibility. Last year it tied up with handset vendor Sony Ericsson to bundle music with its phones, a program that's now rolling out worldwide.

So the DRM stays. It's not totally restrictive - playlists can be shared between Omnifone subscribers, which are then populated from the server - a sideways sort of P2P. But it's messy and likely to create confusion. Is a song in your "portable allowance" (DRM free) or not?

The car portion of the new strategy is quite intriguing. It's one of several auto announcements expected at MWC this week, the result of car makers wanting to put the internet in vehicles for navigation, help or just plain radio. DAB has failed to take off in cars.

Cars with HSDPA may hit the market next year, "at the high end" suggest Lewis.

ISP music choice

So what's an ISP to do? Virgin's Playlouder-based service remains on ice, but the exclusivity no longer applies. It's the most comprehensive music option for punters, allowing to share what they have already acquired and store on their hard disks, as well as offering a streaming service.

Spotify (which we reviewed here) has gained plaudits for its streaming service, and it's targeting mobile users. But questions hang over the ad-supported revenue model, and with no public demand (as yet) for paying for radio, it may well turn away from B2C into a licensing. 7Digital is also offering a music service to ISPs. ®

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