Will Virgin Digital Displace iTunes?

Virgin Group's involved in all sorts of businesses: cell phones, airlines, hotels, and, of course, even spaceflight. In addition to other Virgin-related news today, though, we learned that the company's making a move that has to do with its musical roots. Anyway, it's back to the future, where Virgin is opening its own online music store, Virgin Digital.

Virgin was once the record label that signed rule breakers such as the Sex Pistols and Culture Club back in the day, although it sold the label to Thorn EMI in 1992. However, now the company's had its hand in all kinds of ventures, mainly in Britain, such as video and bridal stores and other varying retail concepts -- Virgin Rail and Virgin Net -- just to name a few.

At this point, Virgin Digital is a U.S.-based service, although the company says it plans to branch out internationally at an unspecified time. Though Virgin charges the going rate per song, $0.99, it undercuts much of its competition by charging a flat monthly fee of $7.99 for a subscription. Compatible with 50 portable devices, the service will offer 1 million songs for sale.

It seems that Virgin could prove a formidable foe for Apple (Nasdaq: AAPL  ) , seeing how Virgin has cornered the market on coolness in branding, something a retailer such as Wal-Mart lacks, especially when it comes to music. (In addition to being stodgy, Wal-Mart's got its track record of sanitizing lyrics -- not too hip, really.)

There are plenty of other competitors in digital music, such as Roxio's (Nasdaq: ROXI  ) Napster, Microsoft (Nasdaq: MSFT  ) , RealNetworks (Nasdaq: RNWK  ) , and Sony (NYSE: SNE  ) . Even Yahoo! (Nasdaq: YHOO  ) and Time Warner's (NYSE: TWX  ) America Online are getting into the mix.

A quick peek at Virgin Digital notes that the service requires Windows 2000 or XP, Internet Explorer, an Internet connection, and "a small talking loaf of cheese." (Mac and Linux users, or those of the many who have switched over to Mozilla's Firefox browser recently, are apparently shut out at product launch.) According to Virgin Digital's copyright line, "We love you." I'm not entirely sure what love's got to do with it, of course.

A trip down memory lane on the Virgin timeline on its website shows just how many ventures Virgin has embarked upon over the last 30+ years it's been in business, and it's pretty dizzying. Its strong ties to pop culture -- and its penchant for getting attention -- could certainly give Virgin a leg up in an industry where Apple has stood out. However, whether it can take more than a small bite out of Apple remains to be seen.

For more on digital music mayhem, check out the following Fool content:

Will Virgin's entry into digital music pose a threat to Apple's musical monopoly? Fools are chatting about the development on our Apple discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.


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