Universal heads assault on iTunes

The music industry is gearing up for another tilt at stimulating digital music consumption by offering users all-you-can-eat music subscriptions, a move that further threatens the dominance of Apple's iTunes store.

The music industry has spent the past few years searching for the best way to get consumers to pay for digitally downloaded music as a way of offsetting declining CD sales and solving the problem of online piracy. Although digital music sales are expected to grow nearly 50 per cent this year, music companies are still overly dependent on iTunes, which controls about 80 per cent of the download market.

The major music companies have been crying out for more competition and some of the largest music companies in the world – Universal, Warner Music and Sony BMG – have moved to support new services from the likes of Microsoft and Nokia with an all-you-can-eat subscription deal called "Total Music" that is expected to go live in 2008.

It is early days with the music majors still thrashing out details of the new service and refusing to comment on their plans. It is likely that the device manufacturers will subsidise the service – which will be embedded in a portable music player – for a set period to attract new consumers who could be offered unlimited downloads for free. Reports suggest the cost of subscribing could be set at $5 (£2.46) a month.

Universal Music is leading the charge against iTunes, balking at the one-third cut Apple takes on every song it sells through its music store. Universal still sells songs from artists on its roster including Amy Winehouse and 50 Cent through iTunes, but is keen to develop new ways to sell music digitally, including recent moves to retail singles via USB sticks.

Previous attempts by the music industry to launch digital music services – notably as a way of combating Napster at the turn of the century – have failed. Likewise, the subscription model for selling music has yet to catch hold.