The service gives consumers the chance to select tracks from thousands of compact discs using a computer and a telephone line. The idea comes from a firm of software engineers called Cerberus.
Representatives from large record companies, small labels, musicians and computer experts were expected at the demonstration.
Cerberus, formed a few weeks ago, has been greeted with curiosity and hostility from the music industry. The company's digital jukebox challenges spin-off industries that flow from musician to consumer, and could render obsolete recording studios, publishing companies, CD manufacturers and record shops.
Ricky Adar, managing director of the new company, is inviting artists to send in digital tape recordings which he will load on to a database and make available, for a fee of a few pence per track, to anyone with access to Internet computer systems. Estimates of the number of people connected to Internet vary from 20-35 million worldwide.
Mr Adar is aware the plan may expose the company to litigation, and has contacted organisations including the Performing Rights Society, which claims fees on music for members.
Copyright on new services such as Digital Jukebox is confused. Basic questions such as whether the approach represents a 'broadcast' media are unresolved.
Mr Adar is anxious not to alienate any section of the industry. He said many record company bosses are unaware of the speed of the revolution taking place in communications technology.
Several independent companies have agreed to Cerberus using their material.
All sectors of the music business face competition from telephone and cable companies, vying for the right to provide customers with entertainment services.
Mr Adar has his sights set beyond the music industry. He also aims to get involved in video transmission, possibly even sending live concerts over the wires.
He says his prime concern is that musicians get the opportunity to distribute their work. Two or three underground US organisations have already begun distributing music over the Internet. 'If we can't do that then there will be no industry left,' Mr Adar said.
He aims to dedicate up to a quarter of the database to new bands with no record deal, free of charge.Reuse content