The service will launch as part of Tesco.com and will come packing 500,000 tracks which can be downloaded for 79p each while albums will cost £7.99.
Tesco is already one of the largest music vendors in the UK and is making a move into the download space as part of its strategy to give its customers an online version of all its bricks-and-mortar services and a desire to get involved in the expanding market. Analyst house JupiterResearch predicts that by 2009, digital music in Europe will be worth €836m.
The songs will be available in the Windows Media Audio (WMA) format which the company says is designed to give consumers the widest possible choice of devices to play their music on -- over 70 music players are now compatible with the WMA format.
However, choosing the WMA format will shut out around half of all music players, given that Apple's iPod -- which won't play the Windows-format songs -- currently has over 50 percent of the music player market according to Apple and over 90 percent according to some analysts.
Jon Higgins, head of e-commerce development at Tesco, said the music market won't always favour the Cupertino-based company.
"The iPod may have 50 percent of the music player market but I don't think it will stay that way," he said, adding that Tesco was hoping to use its retail history to gain market share.
There are, nonetheless, some hints that Tesco is hoping for a repeat of the iTunes strategy. While the iTunes music store is renowned for not making Apple a great deal of money, the subsequent sales of the iPod make the whole enterprise worthwhile.
Tesco already sells a selection of digital music players from manufacturers including iRiver and Creative - all of which can play WMA files. iPods are noticeably absent from the site.
With more and more companies joining in the music download fray - Virgin, Sony, Coke and Oxfam to name a few - Higgins said he believes the market is reaching its saturation point.
"I really don't think it will be boom and bust," he said, "but I don't think there's room for many more players in the market".
The site itself, tescodownloads.com, gives a hint at its future direction, according to Higgins - with the generically-named Tesco offshoot aiming to move into offering music videos and eventually full-length feature film downloads.
"In a few years' time, when internet infrastructure improves... I see a time when we'll sell music and video - DVD quality films," he said. "Music is the first step into the market. The store isn't a music store, it's a downloads store."
