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Virgin and Spotify: A step forward for digital music

But most of the work has yet to be done

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Analysis Two years ago I wondered if the ISP and music industries were even worth saving – given that they'd contributed so much to consumer unhappiness, a lack of innovation and anything resembling entrepreneurship.

Now that Virgin has done a deal with Spotify, it's time to revisit this. The company won praise from Culture Minister Ed Vaizey yesterday, who contrasted it with BT and TalkTalk's preference for litigation over innovation. I think the deal gives a hint of what music services might one day look like in the home, but that day still seems a very long way away.

Much of the detail remains to be thrashed out, Virgin told us, pointing out that its ambitious efforts to launch a bundled music download service (announced two years ago) continue.

Virgin told us the service is centred around the TiVO box. Spotify isn't – at least not yet – another menu option on the Virgin EPG. Virgin's TiVo box does time-shifting, runs apps, and has a dedicated 10Mbit/s path. The TiVo app is just another Spotify client. "The experience is identical," according to a Virgin spokesman.

The immediate benefit for punters is that they'll get a cheaper Spotify than they would have if they had subscribed with the provider directly. Since the TiVO is already hooked up to a home cinema system in many cases, it replaces the hi-fi.

What hasn't been resolved is much more interesting. Does a Virgin household get just one account, or can each member of the household have their own? Can you transfer music for offline mobile access, on your iPhone or Android device? How many devices will it support? Can you buy music and add it to your PC? Can several members of the family do so?

"At this stage we've announced a deal, and much detail is being worked out – related to concurrency and individual access," said a spokesman. "But we view it as a family proposition."

What can't escape our notice is that a TiVO box is a bit more than a humble client – it's a powerful server in its own right. And being a server means all kind of useful capabilities can come into play.

Many of us have boxes labelled "home media servers", and once you've dicked around a bit, they do the serving from the box to other devices in the house quite nicely. What's broken is the other side: the part from the box to the content itself.

Consumer NAS manufacturers have – naughty, naughty – attempted to bridge this broken supply chain by bundling in easy access to Rapidshare and eMule services, and Bittorrent support. They do the content acquisition. They don't make it any less "broken" as a legitimate market, though.

All of the queries I posed above are basic consumer issues; they could be solved by an enhanced Spotify. And the potential attraction to ISP partners such as Virgin is obvious: they earn a permanent niche in the corner of your home. Bundling music services with ISPs has been touted as a way of reducing churn – customer turnover – and Eircom's bundled music service has helped transform its image. But a bundled service per se won't reduce churn when every other ISP is offering something identical.

There's lots of innovation to be done for home to make it generally less of a pain – but this work needs support from ISPs, consumer electronics manufacturers and most of all the music industry itself. Painful battles are still being fought behind the scenes over licensing and royalties. The ancient split between streaming music (formerly known as "radio") and a discrete recording (formerly known as a a "record") should have been healed. Cloudy services do nothing to resolve this; they even (ahem) cloud this issue.

We shouldn't have to care about any of this. But Spotify and other services on TVs should be welcomed, because strong competition to iTunes and Amazon is just what we need. It keeps everyone honest. ®

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