Virgin Will Price Spotify ‘Significantly Less’ Than Spotify Does

Virgin Media (NSDQ: VMED) CEO Neil Berkett says he will bundle Spotify with his broadband service for a “very, very low monthly subscription”.

Spotify charges £9.99 for its Premium service. “We’ll bundle it in to our broadband for significantly less than that,” Berkett told investment analysts. Actual prices were never disclosed in the companies’ recent bundling announcement.

“(The deal) was spawned from a transaction we tried to do two years ago,” Berkett said, referring to Virgin’s vapourware announcement of an unlimited downloads plan, which only garnered UMG’s buy-in. “It’s hard for ISPs to work with the content industry sometimes.

“(With Spotify), we had to sign a deal with each of the music labels and with Spotify. The reason they (labels) did it is, we’ll be more forceful when it comes to piracy. It’s the right thing to do to create digital confidence from our suppliers and customers.

“I’d like to do the same thing in movies but somebody has control of the rights window,” Berkett said, referring to Sky Movies’ lock-up on premium subscription rights – something which prohibits Lovefilm’s digital subscription offering and which is currently being scrutinised by UK competition authorities. Virgin-Lovefilm discussions for carriage on Virgin’s TiVo (NSDQ: TIVO) have so far come to nought.

Virgin wants to use content to induce customers to subscribe to its multiple services. It lost 36,000 customers in the quarter to June 30, but average monthly customer revenue grew 3.2 percent to £47.35 and company revenue grew 2.2 percent to £986 million.

Virgin Media has a fixed-line exclusive on Spotify for TiVo and bundled broadband access, which its customers will also be able to use on Virgin mobiles on a non-exclusive basis.