iTunes rival to let fans download free

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Universal Music has given its approval to SpiralFrog, an online music store which relies on advertising for its revenue.

By being completely free, Spiral-Frog's service represents a departure from Apple's popular iTunes online store - which charges per music track - and other legal download services, which have a subscription fee.

The service, due to start in December, reflects music companies' willingness to experiment as they try to capture some profit from the boom in digital music distribution still dominated by illegal file-sharing networks.

A report released last month by the International Federation of Phonographic Industries revealed there were still 40 illegal downloads for every legal one.

Although Apple's iPod and its iTunes music download service control 80 per cent of the market for legally downloaded music, competition is expected to increase in the run-up to Christmas.

Merrill Lynch last week raised its forecast for growth in the sector, predicting it would expand by 35 per cent this year in non-US markets to £6.1billion. US growth is expected to increase by nearly 30 per cent to £8.4 billion.

This year the phonographic industries' federation predicted that 60 million music players will be sold worldwide, many of them not compatible with Apple's services-As well as new sites such as SpiralFrog, established companies are getting ready to flex their muscles. Microsoft is to launch Zune, which will offer music players and a music download store. MTV has launched Urge, a service that has downloadable music and music videos via subscription.

"Offering young consumers an easy-to-use alternative to pirated music sites will be compelling," said Robin Kent, SpiralFrog's chief executive.

Mr Kent has held talks with labels Warner, EMI and Sony-BMG and hopes they will be lured by the surge in online advertising.

Other music services are looking to advertising for their revenues. A new version of Napster allows consumers to listen to up to five tracks free while they view advertising.

Meanwhile, video-sharing sites such as YouTube have held talks with music companies about showing music videos, which would then be supported by advertising.

Top five downloads