Can Sky beat Apple at the iTunes game?

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Sky, better known for news and sport television broadcasting, has today announced that it is entering the online music business with an ad-free streaming download service. All of the four million songs accessible by users of the service will be available by way of unlimited online streaming as well as in MP3 format for storage and playback on any compatible device.

Launching on the 19th October, Sky Songs in the UK will start off by providing access to new release and back catalogue songs from EMI. Sony, Universal and Warner along with a host of independent labels for good measure.

Mike Darcey, Sky’s Chief Operating Officer, says "Our music partners bring an outstanding catalogue and unrivalled expertise that complements Sky’s strengths in content distribution. Sky Songs will reach out to consumers who want legitimate digital services offering choice, ease of use and great value. Offering legal access to digital music is a vital step in combating illegal downloading."

That's as maybe, but the service is up against existing online music powerhouses such as Apple's iTunes and the streaming service Spotify in a market which was worth £106 million in the UK last year, that's an increase of 48% from the year before. Not that the CD market should be ruled out either, in terms of competition, at least not just yet. Sure, it is on the decline with income down 8% last year but it still managed to earn £856 million in the UK which is none too shabby and far outstripped online music sales in terms of income.

So how much is Sky Songs looking to charge users?

According to the press release:

Sky Songs offers users unlimited streaming, plus download-to-own tracks and albums from £6.49 a month. Customers can also purchase additional music on a per-track or per-album basis from 65p and £6.49 respectively.

There are two subscription options available:

pay £6.49 and download either a £6.49 album or 10 songs, and receive unlimited access to listen to over four million songs online for one month; or

pay £7.99 and download either a £7.99 album or 15 songs, and receive unlimited access to listen to over four million songs online for one month.

So, unlike Spotify there is no free ad-supported model, which means it will struggle to steal share away from them - although the subscription is cheaper than a Premium Spotify, ad-free, account. iTunes may feel the heat a little more, especially as the downloadable MP3s are in a DRM-free format and the streaming model is certainly starting to appeal to the younger listener these days. Just look at how the iPhone App Store is beating iTunes and the presence of streaming music apps on the iPhone for example.