America’s second-largest online music store, eMusic, has launched a European service that will undercut Apple, the market leader, by offering tracks for as little as 17p each - more than four times cheaper than the iPod maker's flat rate of 79p.

The news comes ahead of an Apple event this evening at which the company is expected to offer film downloads alongside music on iTunes, its online store.

However, the new eMusic site will not go head-to-head with Apple, as it only sells music produced by small, independent record labels. Major labels have refused to allow eMusic to sell their tracks, arguing that it does not offer enough protection against music piracy.

Unlike iTunes, eMusic allows users to make unlimited copies of the songs that they download, and to play them on any digital music player, computer or hi-fi.

Apple’s store permits unlimited copies of individual tracks, but they can only be played on up to five computers. Songs bought from iTunes can not be transferred directly to music players other than Apple’s iPod.

EMusic advertises itself as a subscription-based service, but it differs from other companies using that model. Napster is the best-known and offers unlimited access to a library of more than two million songs for £9.95 per month. Songs can be downloaded, but they expire when the subscription is cancelled.

In contrast, eMusic allows customers to keep the songs they download even if they cancel their subscription, but it does place limits on how many can be received each month. Basic membership includes 40 downloads and costs £8.99 per month (22p per song), while a premium package includes 90 downloads and costs £14.99 (17p per song).

Subscribers will have access to 1.7 million tracks from 8,500 independent labels, and the company has employed music journalists to guide customers through the site and make recommendations.

"Thanks to the abundance of highly successful independent labels in Europe, eMusic’s European customers will benefit from an even greater selection of labels and artists," Steve McCauley, the company’s European president, said.

"EMusic looks forward to giving the 30 million-plus iPod owners in Europe a choice about the type of music they buy and where they buy it."

The company claims an 11 per cent share of the US market, where it has been operating since 1998, but without access to big-name artists it has little chance of reigning in Apple, which sells between up to 70 per cent of legally downloaded tracks.

Universal, the world’s largest record label, recently backed a start-up online store called SpiralFrog, which will offer free, downloadable songs on its advertising-supported site. Analysts predict that the other major labels will also back the site, which will include copying restrictions on the music it sells.

Microsoft is also planning to launch a digital music player called Zune and an online music store in an attempt to dislodge Apple from its dominant position.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts