BSkyB has unveiled plans to take on Apple’s iTunes with a new subscription-based digital music service, with packages likely to be priced around £10 a month.

The satellite broadcaster, 39.1 per cent owned by News Corporation, parent company of The Times, has signed up Universal Music, the world’s largest music group, and hopes to recruit the other three majors shortly.

Subscribers will be able to listen to any song in the Universal catalogue, comprising artists ranging from ABBA to U2, by streaming it to their computer. Songs will also be available to download and own, although the number depends on the fee paid.

Lucian Grainge, the chairman of Universal Music International, said it was hoped that the service would help to stop piracy, because every song would be available legally for streaming. “This is our attack and our defence,” Mr Grainge said. “We don’t want to tell our consumers what they can’t do, but remind them of what they can do.”

Sky refused yesterday to release any details of pricing or launch timing – or even spell out the name of the service – but it would be logical to provide it before the end of the year. The pricing of similar subscription products varies from £5 to £15 a month.

Apple’s iTunes dominates the digital music market, although it sells songs and albums only on a download basis. Competing subscription services, such as Napster or HMV’s digital service, have failed to make significant inroads into Britain, although services such as Rhapsody have done well in the United States.

Mike Darcey, Sky’s chief operating officer, said that his company would retain a majority stake in the venture but Universal would have a share-holding, with other stakes on offer to the remaining music majors.

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