BSkyB signs Universal for online music service

LONDON (Reuters) - Britain's largest pay-TV firm BSkyB is to launch an online subscription music service and has signed the world's largest music group Universal as its first partner, in a deal that could challenge Apple.

The service will offer downloads to keep and unlimited listening through streaming for a single monthly subscription service. The tracks will be in the MP3 format, meaning they can be used on many devices including the iPod and mobile phones.

BSkyB will form a new joint venture to launch the service in Britain and Ireland, building on its relationship with millions of customers and Universal's hundreds of thousands of tracks from artists such as Amy Winehouse and U2.

The pay-TV group, which has James Murdoch as its non-executive chairman, said it was in talks about signing other music companies including the major music groups and would release more details at a later date.

(Reporting by Kate Holton ; editing by Sue Thomas)