The timing must be coincidental, but file these two news stories under signs of the times: The last two Virgin Megastores in the U.S. finally closed yesterday–a development which wasn’t entirely due to the slow death of physical media, but was surely be remembered as a significant moment in the ongoing digitization of entertainment. And today, Virgin Media–a UK ISP, phone carrier, and TV provider that’s another arm of the far-flung, loosely-joined Virgin empire–is announcing what may be the first above-board music service that lets you pay a flat fee not only to stream all the music you like but also to download it in MP3 form and keep it, even if you cancel the service. The company has signed up Universal as a music provider, and says it’s working on getting other major music companies on board. It’s going to be available later this year in the UK. But in theory, anyhow, it’s the format of music service we’d all choose, given the opportunity.

What’s the catch? Well, the press release on the new service says this:

The new service reflects the shared commitment of Virgin Media and Universal Music to keep step with growing demand for online music in an increasingly digital world. In parallel, the two companies will be working together to protect Universal Music’s intellectual property and drive a material reduction in the unauthorized distribution of its repertoire across Virgin Media’s network.

This will involve implementing a range of different strategies to educate file sharers about online piracy and to raise awareness of legal alternatives. They include, as a last resort for persistent offenders, a temporary suspension of internet access. No customers will be permanently disconnected and the process will not depend on network monitoring or interception of customer traffic by Virgin Media.

Not explained: How Virgin can identify you as a file swapper and suspend your service if it isn’t watching your online activity in some fashion. I don’t have any sympathy for the plight of music thieves whose activities may be foiled by technological means. But I wouldn’t want to give Virgin Media my money as a customer without a clear idea of exactly how it’s identifying file sharers and interfering with their activities. Absent a clear explanation of what’s going on, there’s an Orwellian tinge to the idea. Call it Big Virgin is Watching You.

 
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Read more: Digital Music, file sharing, Virgin