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Microsoft to launch music streaming service

Spotify rival will be made available by the end of the month

Microsoft is to launch a new music streaming service to rival Spotify by the end of this month. The service will be promoted through MSN and other parts of the company's network, possibly including Zune where available in the US and Canada, but could also be made available over Xbox Live.

"Music is an important area for Microsoft. We are looking at launching a music streaming service imminently," Peter Bale, executive producer of MSN, told the Telegraph. "It will be a similar principle to Spotify but we are still examining how the business model will work."

The service will enable users to stream music to their devices for free and also download to own, possibly using a similar model to Spotify which offers free ad-supported music streaming, or ad-free streaming for a fee of GBP 9.99 a month.

Only last month Microsoft announced a partnership with Last.fm to offer free music to Gold Xbox Live members. The internet radio service is home to over 3.5 million songs.

Sony has also recently introduced music streaming to the PlayStation 3 via VidZone in some PAL territories. The free, ad-supported service launched with 10,000 music videos and the ability for users to create video libraries and playlists.