I'm back at Virgin Megastores again, except it's now zavvi entertainment group following the recent management buyout. I'll be heading up online operations for the next few months, so expect posts here to be sporadic at best.

Of course, if you're buying any entertainment products you owe it to yourself to buy them from the site. And do let me know how you get on.

Maybe it'll follow later but as I've said before this is the real opportunity in music delivery.

Tivo has announced a tie-up with Real Networks to make the Rhapsody Music Service available to anyone with a Tivo box and a broadband connection. The Rhapsody on TiVo service will cost $12.99 for TiVo subscribers, and be available at no additional cost to existing Rhapsody subscribers with broadband-connected TiVo boxes.

In a week when Ted Cohen argued that subscription services will win over a la carte purchasing, maybe this is one more step towards achieving traction. Two more things need to happen, however, before they'll really take off.

First there needs to be complete, seamless integration in the home between the set top box, TV, PC and sound system. This applies equally before digital distribution of film and TV can be successful. And second, the price will need to be absorbed into a total entertainment bundle from Sky, BT, Virgin Media or whoever. But it will happen, trust me.

Now, I don't know enough about the commercial arrangement or indeed BBC Worldwide's funding to write with any authority, but jeez, if I was in the travel publishing business I wouldn't exactly be doing cartwheels today.

Sadly, despite having a stunning user interface, a catalogue of 2.5 million tracks and the Virgin brand behind it, it was never going to work for a number of reasons.

First, the margin available after the record companies and musicnet have taken their share is tiny - pennies per track. So the only way to make money is to sell large volumes of tracks.

This needs investment, which Virgin has been unable to provide. It's hard enough supporting a retail chain in a declining market, let alone sinking money into an online service with less than 1% market share, that will take years to become profitable - if it ever does.

Then there's Apple, which of course, dominates the download market. It's somewhat easier for Apple to operate in this market since its real objective is to sell iPods, not music. The only way to take on iTunes is to compete on one or more of catalogue, convenience or price and it seemed to me that there was a lack of flexibility and interest from the record companies in supporting attempts to do so. Virgin wasn't able to.

Amazon might, though - its new download store is offering higher quality (256Kbps) tracks at 89 cents (10 cents less than iTunes) with the benefit of Amazon's one-click buying. There's also an MP3 Downloader application that automatically adds purchased tracks to iTunes or Windows Media Player libraries. It's been a long time coming, but hopefully Amazon will provide the real competition that the market needs.

Universal Music Group is experimenting with a service called TotalMusic, where customers of Internet service providers or mobile carriers would pay a blanket monthly fee for the rights to freely trade unlimited music downloads on the network.

There are some issues with forcing ISPs to opt-in, and also with the administration of royalties, but this is an important initiative that could pave the way for a new form of bundled music service.

Sometimes it seems we lurch from exciting new initiatives to reactionary fear of anything that shakes up the existing models. When, oh when, will content owners realise that:

1. Consumers can get anything for free anyway, so to compete with free you have to work on a low price/high volume model.

2. Consumers aren't stupid. They know that the costs of servicing a download transaction are far less than the costs of producing a DVD, packaging it, shipping it to retail outlets and absorbing unsold stock.

3. It's better to develop a wider customer base, perhaps spending less on the initial product but becoming lifetime customers of a franchise and potentially customers of related products and services including merchandising, than stake everything on them buying the DVD box set. Anyway, that's why there are extras and special packaging in box sets.

4. One of the great things that the internet allows is market testing, with the opportunity to produce and analyse different approaches based on the huge amount of measurable data available. Try it on a limited basis, and see how it pans out.

Apple, of course, while being right on this point, is being mischevious as usual. It wants to pull the strings but is inflexible itself when it comes to differential pricing. As I've said before, the single price approach was right when the market needed simplicity and clarity to encourage new customers, but now a more sophisticated approach is needed.

Sort yourselves out, all of you...

My thoughts on this? First, it's a welcome addition to the two current models of buy-to-own and subscription. In fact it's pretty close to a subscription model except you don't have to pay, so that ticks my boxes.

To state the obvious, it can only be really successful if all the majors are involved, not just Warner. Just as the record companies discovered when they tried to set up their own online stores years ago, to be credible users need to be able to listen to the artists they like, not just those who are on a particular label.

The most interesting question for me is about the economics. Either Warner has agreed to a percentage of ad revenues going forward, in which case they are reliant on the revenues that Imeem can generate (unknown, presumably). Or Imeem has given guarantees to Warner, in which case they are exposed if things don't quite go as planned. So one of them is prepared to take a big risk - which I like.

It looks like you can embed tracks from Imeem on your own website - I'm not sure where the ad revenues are coming from in that scenario - but I look forward to seeing the facebook app.

Like everyone else, it seems, I've joined Facebook.

I've been a member for about 3 or 4 weeks, and in that time I've been silently cursed, had a sheep thrown at me, been turned into a Zombie and been poked more times than I care to remember. I've baked cakes, thrown a few sheep back, written and drawn grafitti on various friends' walls. I've also found myself updating my Facebook status by mobile on the bus while on the way home from a big night out (not recommended).

You might surmise that there's been a bit of time wasting, and you'd be right, although I'd claim that participating fully is an essential part of my research.

But it's not all fun and games. I've joined some groups and taken part in group discussions. Today I set up a group for some ex-colleagues to share some of the fun times we had working together. I've searched and found a few old friends and although I don't necessarily want to keep in close contact with all of them it's nice to see what they're up to.

Writing under the moniker rudyard, my ex-compatriot (whose identity must be protected) has been providing some ace musings in the name of customer service. Check out the latest here.

After a period where not much happened, the music industry is on hyperdrive, with other labels considering joining EMI in removing DRM, Amazon announcing an MP3-only music download service, Peter Gabriel's new We7 venture offering ad-supported music and 7Digital re-launching its service with 1 million of its 2 million tracks in MP3 format (and from 50p).

The common theme is that all of these services are giving their customers more control over what they do with the music they buy. And this is just the start. I keep harping on about it, but while the subscription model hasn't caught on yet, the day will come when someone comes up with a model that offers free access to a couple of million tracks on a subscription basis - then watch it fly.

A film would cost $2.99 for a 30 day rental and could be transferred to an iPod for viewing during the rental period.

Mark my words, this is another step on the way to an iTunes subscription service for music.

I do like the simplicity of the proposition. I hope they make it work.

On the plus side, fans are ready to spend money at gigs, and for the youngsters who don't have a credit card it overcomes a payment problem. Plus, it's a cool collectible.

On the minus side, it's another format to explain and the same result could be achieved by the band by simply giving a web or MySpace page address to their fans and charging them when they get to the site - as for the credit card thing, well they've all got parents haven't they? I know who pays for my son's online purchases.

But I'll watch it with interest. I've long believed that merchandising will increase in importance, because it's a well established way to combine a physical item with a brand or intangible - music, film and TV being perfect examples. It's often said that you can't put a download under the Christmas tree, but in a high speed internet environment coupled with a networked home there's no reason why you can't gift an item of merchandising with an access code and a simple mechanic to get hold of the associated content.

Even better, Swedish market research firm Berg Insight expects digital sales to offset the decline in physical sales and push the European market back into growth by the beginning of next year. The drivers are music enabled mobile phones and unrestricted internet access.

So all's right in the world after all. What was all the fuss about?