The entertainment market leader is to launch HMV Digital on Monday - three days after Virgin - but believes its digital offer can mirror the dominant position it holds in the physical music market.
HMV head of digital Mark Bennett said: 'HMV has got to look to match the strength that we've got on the high street - where we have 25 to 30 per cent of the audio market - in the digital world. That has to be a target for us. Although at the moment we're going for a small percentage of the market, the non-iPod users, I believe we'll grow the market as well and I don't see a reason why we can't go beyond our physical share with digital.'
The music download market is worth about£40 million in the UK. Apple's iTunes boasts a 66 per cent share, according to June data from Informa Media.
But HMV, working in partnership with Microsoft and software enabler MusicNet, believes it can be a serious competitor to iTunes, using its record label contacts to develop a more comprehensive and authoritative offer.
The retailer will back up its digital launch with a£1 million press and online marketing campaign and a month-long series of live performances in stores.
HMV Digital will have 1.3 million tracks available. The majority will be priced at 79p - the same as iTunes and Virgin Digital. Both HMV and Virgin will also offer some tracks for less than 79p.
HMV is offering an innovative unlimited subscription model at£14.99 a month. Customers can download as many tracks as they want and keep them permanently, providing they keep paying the subscription. If they do not continue paying the monthly fee, tracks will be automatically erased 30 days after purchase. Meanwhile, Virgin is offering two subscription models at£9.99 and£14.99.
Both retailers' digital services will not be compatible with Apple's iPod, but will work with most other MP3 players from big brands such as Toshiba, Philips, Samsung and Creative.
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