Sky has announced plans to take on Apple's iTunes with a subscription-based music service that will give customers unlimited access to music from the likes of U2 and Amy Winehouse.

Subscribers will be able to listen to as many on-demand tracks as they wish from the labels who sign up to the service, but the number of songs they'll be able to download will be restricted each month. Downloads will be available in DRM-free MP3 format, which means customers will be able to transfer them to a range of devices.

"We aim to offer an easy and affordable service for all UK music fans, while ensuring that artists are properly rewarded for their creativity," said Mike Darcey, chief operating officer for BSkyB.

Music label Universal has already signed up to provide "hundreds of thousands" of tracks to the new iTunes competitor when it launches later this year. Sky said it is also in discussions with other music companies, both majors and independents, to offer content through the service.

The online music service will be operated by a new joint venture company, in which Sky will be the majority shareholder. Sky said demand for the music service could also be boosted by attracting from its online portal and broadband access businesses.