Music downloads from the service will be compatible with the Windows Media Audio standard and usable by more than 75 portable players currently on the market, HMV said. Portable players, as well as the service software, will be sold in the company's stores and online. The service is slated to launch in the second half of 2005.
Microsoft applications under development for the service include a customized jukebox that will let users select, purchase and manage their music online--all in one place. HMV said it intends to spend about $19 million (10 million pounds) on the download service and initial marketing.
The digital-music market in the United States and abroad is currently dominated by Apple Computer's, which is available in the United Kingdom and other European countries. Recently, there have been about Apple's international pricing for iTunes.
HMV's service will not be compatible with Apple's, and when the service is launched next year, HMV stores will stop selling iPods, a representative for HMV said.
"It's great to be involved in such a leading-edge retail project that will support an explosion of choice, enabling music fans to buy music in-store and online--in fact anywhere--on a whole range of devices from different manufacturers," Microsoft U.K. managing director Alistair Baker said in a statement. "The partnership extends to the development of the (software), which will be constructed by a joint team from Microsoft and HMV."
HMV already operates a subscription music download service via its Web site, where consumers can get 50 tracks for about $9.57 a month. HMV's non-U.K. Web site is run through a partnership with. The companies did not say what impact the new service would have on the existing service.
Reuters contributed to this story.