HOWZAT

In making its move first, Napster, which had previously only said that the service would be available “before the end of the summer”, scored an important victory over its biggest rival, Apple’s iTunes.

Napster has learnt from past experience. Apple beat it to the market by six months in America last year and has since established a useful lead in the growing digital music industry.

How does Napster stack up as a business?

Online music is still a minnow in the $32 billion world music industry pond.

Napster has spent about £70 million on infrastructure. It now needs to capture users across Europe as quickly as possible to move itself into the black.

It has some way to go: earlier this month, Roxio said Napster sales in America totalled about £5.4 million since Napster's commercial launch in October.

Apple, meanwhile, has sold more than £40 million worth of downloads since launching in April 2003.

How much music will be on offer?

Christopher Gorog, chief executive of Roxio, the US software company that owns Napster, said that the site would launch with a catalogue of around 500,000 songs. Within a month that figure could reach 700,000.

The website has the support of BMG, EMI, Sony Music Entertainment, Universal Music International and Warner Music International, as well as some smaller labels. With such a huge volume of material it is likely that most genres will be represented.

And how much will it cost?

For non-subscribers, Napster downloads will cost £1.09 a track. Subscribers will pay 99p to copy a track but will be able to listen to unlimited amounts of music for a flat fee of £9.99 a month.

However, the launch could herald a price war in online music. Napster's main rival in Britain - OD2, which is co-owned by Peter Gabriel, the former Genesis frontman – announced this week that it would cut the download prices it charges its e-tail partners by 50 per cent.

Meanwhile, consumer groups have complained that the British Napster is twice as expensive as its American counterpart. Roxio passed the blame on to the wholesale prices charged by record labels and VAT.

So is this the future of music?

Until an even bigger idea comes along, yes.

Record industry executives, citing "overwhelming evidence" have argued that illegal download sites - from which users download an estimated 1 billion songs a month worldwide - have been responsible for a 10 per cent fall in conventional music sales.

Research found that, while eight million British internet users downloaded music, 92 per cent were doing so using illegal sites. Consequently, the record companies have shown themselves to be keen to latch on to this new form of distribution.

At the same time, while old-fashioned record-store owners and proponents of pirate sites such as KaZaA both argue that people who download music are actually more likely to go out and buy CDs, it is hard to see how thriving online services can not hit conventional sales.