Virgin Digital shuts down its U.S. service


DENVER -- Like the short-lived Virgin Electronics MP3 player, the Virgin Digital subscription music service is no more, at least in the U.S. Over the holiday break, Virgin Digital U.S. emailed subscribers informing them the service would be shutting down. The U.K. version of the Virgin Digital service remains active.

Representatives from Virgin Digital could not be reached for comment.

The company is referring subscribers to fellow music subscription service Napster. Visitors to the Virgin Digital U.S. Web site are redirected to the homepage, which now reads "Welcome Virgin Digital Customers."

A Napster spokeswoman said Virgin has provided its full subscriber contact list to the company, and that Napster will be e-mailing former Virgin customers to invite them to join the Napster service. Virgin Digital customers who accept the offer will have to redownload any subscription tracks acquired through the Virgin system. Paid downloads of course will remain.

Virgin Digital struggled to gain a foothold in the incredibly competitive digital music market, and its subscription service never took off after relaunching the service in early 2005.

Last September, president Zack Zalon and chief technology officer Brendon Cassidy left the company to form a digital media consulting firm called The Wilshire Group, and continued to lead the company in this consulting role.

In other subscription music news, Napster revealed it added 48,000 subscribers in its third quarter earning period, ended Dec. 31, 2006 (not a result of the Virgin deal) -- beating both internal and analyst estimates-to total 566,000 paid monthly customers worldwide.

The company also expects to report more than $28 million in revenue for the quarter when it releases formal financial results on Feb. 8.