Tesco is to launch a music and film digital download service this month, offering 3.3 million music tracks.

According to the Daily Telegraph, by the end of the year all Tesco Digital’s music will be compatible with iPods and other MP3 players, in a move that will shake up the online entertainment market.

Tesco Digital will also offer downloadable TV shows and computer games. The supermarket chain offers a limited download service at preasent, but its music is only available in Windows Media format. The new platform-neutral service means it will compete head on against Apple’s iTunes, but it will also worry rivals such as HMV.co.uk.

A Tesco spokesman said the download service would be “competitively priced”.

Tesco Digital will initially offer 1.6 million of its 3.3 million tracks in the MP3 format.

However, all the music will be in the MP3 format by the end of the year.

Tesco commercial director Graham Harris told the Daily Telegraph. “We wanted to create an exciting and easy-to-use entertainment shop that Tesco customers of all ages and technical ability can use and trust.

“We’re starting out with a comprehensive music offering, but customers can expect downloadable TV and films as well as games to buy very soon. Music is just the start – it really is a case of watch this space.”