Sky takes on Apple iTunes with MP3 music service deal

Sky is to launch an online subscription music service to rival Apple's iTunes in Britain and Ireland.

The pay-TV firm has partnered with the world's largest music group Universal to offer a monthly subscription service with downloads and unlimited listening through streaming.

The tracks will be in MP3 format, meaning they can be used on many devices including iPods and mobile phones. There will be thousands of Universal tracks available from artists such as Amy Winehouse and U2.

Sky's non-executive chairman James Murdoch  said they  were in talks with other major music companies to widen their music range.

'In a world where a majority of UK homes have high speed broadband access, consumers will welcome a safe, state-of-the-art service and legal alternative to those services which exploit musicians without compensation,' Universal's Lucian Grainge said.

The music industry has been desperately trying to boost digital sales in recent years after piracy hit the market.

But it has been constrained by the dominance of Apple's iTunes service which has more than 70 per cent of the digital music market, which some analysts suggest has prevented music companies from negotiating better deals.

The new service will offer a range of pricing levels, with higher prices allowing for a greater number of downloads.

Grainge said he was extremely open minded when asked whether he would look to pursue similar deals with other partners in different countries.

The service will launch later this year and will initially be PC-based. Details of pricing, the name of the service and a launch date will be released later.

Sky will be the majority shareholder, and like Universal, other key partners will be invited to take a stake.