European Telecom Giant Offers Flat-Fee Music

Sam Gustin asks: If you could pay a small monthly fee bundled into your internet service bill for access to a vast library of music downloads from all the major labels, would you do it?

For many American consumers, the answer appears to be no, judging by the response to a similar proposal floated by Warner Music Group consultant Jim Griffin earlier this year.

But outside the United States, the idea is gaining traction.

Today, Orange, the internet service provider operated by giant European telecommunications firm France Telecom, is launching a monthly subscription-based music download service in conjunction with the French divisions of all four major record labels.

For American consumers, it's the rough equivalent of having your local ISP -- Comcast, Time Warner Cable (Road Runner), Verizon, or AT&T, offer nearly unlimited music downloads from the major labels for a flat monthly fee.

Orange's service, called Musique Max, promises customers the ability to download up to 500 songs per month from a comprehensive catalog of over 1 million major label and indie titles for a fee of E12 of per month, (about $19 per month at current currency rates.) Users can transfer songs to most mobile devices -- but not iPods -- and keep them for as long as they wish.

"The economic model in the music world is changing fast, and we considered it would be essential to pursue a proactive approach with partners like Orange," said Nathalie Collin, a vice president at EMI Music France, in a statement announcing the plan. "Partnership with organizations capable of expanding and facilitating access to digital music is our initial response to the problems that illegal downloads raise as regards hindrance to artists' development."

The Orange launch is further evidence that the major labels are rooting around for new business models in the face of widespread online piracy. It's unknown whether Orange's offering would be bound by DRM, (Digital Rights Management), which restricts use of digital music files, or how the telecom giant plans to deal with rampant peer-to-peer music piracy. France Telecom, Orange's parent company, did not immediately return calls for comment.

Until now, most internet service providers offered access to Web activities like email, instant messaging and Web browsing. But increasingly, Web service providers are looking to offer music and movies as well. Meanwhile, Web-based subscription-based digital music companies abound, most notably the RealNetworks spin-off Rhapsody, not to mention well services from  Yahoo and myriad startups.

"New digital music consumption modes continue to emerge," said Thierry Chassagne, the president of Warner Music France, in the statement. "The Orange package goes further than one-off downloads to mark a turning point in the development of new usages.This is an innovative alternative that meets consumers' needs for greater flexibility, mobility mand cataloguscope, without infringing on artists' rights."

As the recording industry hunts for a new business model, ad-supported music sites, like Imeem, have gained favor. MySpace, the giant social networking site, recently announced a partnership with the major labels to offer ad-supported streaming music.

Apple's iTunes remains the leader for legal online music downloads, with over 80 percent of the market. 

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Laura Rich is a co-founder of Recessionwire, which provides news, advice, perspective and humor about the recession and the recovery.