BSkyB and Omifone to offer unlimited downloads

BSkyB is reportedly in advanced talks with music service provider Omnifone about launching an unlimited music download and streaming service. UK-based Omnifone has international licensing deals in place for such a service with all four major music labels.

BSkyB first signalled its intention to launch an unlimited music service last July, when it signed an agreement with Universal Music. At the time, BSkyB CEO Mike Darcey said he wanted to launch a service that would rival Apple's iTunes store, claiming there was "unmet and untapped demand".

BSkyB is now in talks with Omnifone to use its technology for the service, according to reports from the Mobile World Congress in Barcelona, where Omnifone unveiled extensions to its music distribution services. The service could be launched as early as spring.

Omnifone will now allow ISP and cable partners to offer music through home entertainment systems, set-top boxes and in-car audio systems using dedicated APIs. The service, called MusicStation Next Generation, allows partners to offer unlimited access to both music and music videos.

Omnifone says these next-generation services will be bundled with monthly subscriber plans, as well as offered to subscribers on a pay-as-you-go basis. Currently Omnifone largely operates in the mobile space, providing music services for Sony Ericsson, Vodafone, Telenor and Hutchison Telecom.

"With today's announcement, Omnifone is offering consumers something better than piracy," says Omnifone CEO Rob Lewis. "Broadband providers can deliver a better music experience; a legal alternative to piracy that differentiates their consumer proposition."

Last month, a report by the International Federation of the Phonographic Industry (IFPI) said that despite a record year for paid downloads, 95% of all music downloaded from the internet in 2008 was illegal with no payment to artists and producers.

Worldwide, some 40bn tracks were downloaded illegally, the report said. Despite changing business models and services, such as Nokia's Comes With Music and MySpace Music, sales were overshadowed by illegal distribution.

"We need to deliver alternatives that recognise the needs and desires of the YouTube generation," Lewis says.

The move towards unlimited download schemes is currently gaining momentum. Last month, reports said Virgin Media was planning to launch an unlimited music service this quarter, but was forced to shelve the plan after a number of major labels withdrew support for the venture.

Meanwhile, the government's Digital Britain green paper recently called for companies involved in a range of media to work together with ISPs to create a framework that would "provide incentives for legitimate downloads".

The report largely dismissed last year's calls by the UK music industry to disconnect illegal file sharers as part of a "three strikes rule", despite advocating warning letters to repeat offenders.

In January, the UK Minister for Intellectual Property, David Lammy, said: "We can't have a system where we're talking about arresting teenagers in their bedrooms."