The founders of IP telephony service Skype, Niklas Zennstrom and Janus Friis, have launched online music service, Rdio (opens in new tab).
The service will allow its subscribers to access a music collection of more than five million songs, and is set to include features like live streaming, browsing other music collections and social networking integration.
Rdio will face stiff competition from existing online music services such as Rhapsody and Spotify, as well as from Apple and Google, who are both expected to enter the market in the near future.
Hoping to make the application available to the greatest possible number of users, Rdio's creators plan to develop applications for the popular iPhone and BlackBerry smartphones.
Zennstrom believes that the launch of Rdio will remove the need to download music, claiming that people will prefer data provided by remote servers to downloading untrusted files onto computers and other devices.
Experts believe that Rdio will need to offer more than existing services if it wants to compete effectively in the online music market, saying that current users want more advanced and secure services before they shift from downloads to using exclusively streamed music.