Radio stations plan iTunes rival to sell music over the airwaves

Commercial radio stations are to enter the music download business in a rival venture to Apple's iTunes, and are understood to have signed up EMI and Universal Music for the venture. New products will allow people to buy music while listening to it over the airwaves.

Commercial radio stations are to enter the music download business in a rival venture to Apple's iTunes, and are understood to have signed up EMI and Universal Music for the venture. New products will allow people to buy music while listening to it over the airwaves.

Consumers will be able to buy music while listening to radio sets in the home or on the move using mobile phones fitted with digital radio chips. Payment will be through a prepaid card available from high street retailers.

The commercial download service is being pioneered by the digital radio group UBC Media, which owns the radio spectrum for broadcasting data across five UK regions that will be used to transfer music files from radio stations to consumers.

In London and Scotland, the equivalent spectrum is owned by Carphone Warehouse, raising the prospect of Charles Dunstone's mobile phone group entering the music download market. Mr Dunstone said yesterday the spectrum had significant potential, but he needed to see technical developments. "I suppose I own the oil well and I'm waiting for someone to invent the internal combustion engine to burn my oil," he said.

At the moment, digital radios such as Imagination Technologies' Bug and the PD 2000 record music digitally but not to the same high quality required for UBC's download service. UBC owns the software that allows radio stations to supply tracks to listeners and has developed a system for paying royalties.

Jenny Donald, the finance director of UBC Media, said: "It is well known that 65 per cent of radio listeners buy music after hearing it on the radio. We think it is a really compelling proposition.

"Commercial radio needs to capture only 10 per cent of the total music download market to double the size of the commercial radio industry. With iTunes you have to log on to your computer or you need to make a wi-fi connection if you want to use it out of the home, but with a digital radio you can use it wherever."

The company said it was investing £400,000 in the service and it expects to announce in the next few days the first commercial radio station to pilot it.

Gartner, the research firm, has predicted that the UK music download market could be worth as much as £4.1bn by 2008. If the commercial radio industry captured just 10 per cent of this business it would nearly double its annual revenues from advertising, which now stand at about £500m a year.