BSkyB has announced plans to launch a new online digital music service in conjunction with Universal. The new business is set to be released by the end of the year and will aim to challenge Apple's iTunes UK market.

Users will pay a monthly subscription fee which will give them access to an unlimited amount of streamed tracks as well as a limited number of MP3 downloads. The music won't be protected by DRM protection software so will work on any hardware device that can play MP3s.

The commercial music download industry is currently dominated by iTunes. But Sky is hoping that the flat monthly fee, as opposed to iTunes charge for each individual download, will appeal to users and help them make inroads into the online download market.