Microsoft plans to release an Xbox music service that combines Spotify-style streaming with the download and storage features of Apple's iTunes.
The software giant, which took on Apple earlier this month with the unveiling of an iPad-style tablet, is apparently negotiating with major record labels for music rights and plans to begin the service later this year, according to a Bloomberg report citing anonymous sources.
Microsoft appears to be building a digital product that allows its customers freedom to consume music in any way, after the company's first foray into the music business was a bust. Customers on its poorly-received Zune service will be moved to Xbox Music, the company said on its website.