Tesco is planning a Napster-style online music business in a move that will strike fear into the hearts of traditional high street music retailers.
The country's biggest supermarket chain already accounts for 15 per cent of chart CDs sold and is now set to erode the position of traditional music stores even further by selling music digitally.
The service, now being developed by Tesco, will allow customers to download the most popular albums and tracks direct to their PCs or mobile devices. The music files can also be copied at home on to blank CDs.
A spokeswoman confirmed the country's biggest supermarket chain was working on a digital music operation. "We are looking at the way digital music is evolving and whether our on-line shoppers want to buy music in different formats," she said. The spokeswoman stressed it was early days in the development of the service but said the company was eager to use new technology to serve customers and enhance its Tesco.com service where people can already buy CDs for delivery with their grocery shopping.
"As one of the UK's leading music retailers, more customers than ever before come to Tesco to buy music, both in our stores and online," she said.
Downloading music has moved rapidly from the realm of the computer nerd's bedroom to become an increasingly important way of selling music. It has been spurred by iTunes, now America's largest music store, which was launched last April by Apple. iTunes has so far sold 30 million tracks at 99 cents each. Many customers download the tracks on to Apple's portable iPod players.
The illegal downloading of music has been blamed by the big record companies, such as EMI and Warner Brothers, for a slump in CD sales in recent years. However, they have now had to face up to the reality of digital music and are supporting a number of legitimate digital music sites, including iTunes and Napster, perhaps the best known site. Once prosecuted for theft by the big record companies, Napster has since been resurrected as a legitimate site by the music majors.
HMV offers digital music sales in the UK, as do internet service providers such as Tiscali, but the entry of Tesco is likely to provide explosive growth for the fledgling market.