Tesco launched an audacious bid to take on iTunes today, with the announcement of a music and film download service that will compete directly with Apple's store.

The UK's largest supermarket said that as of next month, more than 3.3 million songs will be available to download from its website, with 1.6 million of those able to be played on any music player, including iPods and most mobile phones.

The deal, understood to involve all the main record labels, will mean that Tesco becomes the first large retailer to offer tracks to UK customers in an 'unprotected' format, allowing users, in theory, to copy songs music they buy from one device to another.

Tesco did not say how much tracks would cost, but said they would be 'competively priced', and would vary depending on the artist.

So far very few download services aimed at UK customers offer songs which can readily be copied, largely as a result of labels' fears about illegal file-sharing. At present only EMI's tracks are available in an unprotected format on iTunes, though they cost the same as other songs - 79p.

Amazon, the online retailer, offers more than 2 million tracks without so-called digital rights management (DRM) software for either 89c or 99c, but only to US customers. Two smaller services, the 7 Digital and play.com, offer DRM-free music to UK customers, in some cases for as little as 65p per track, but with limited catalogues.

Tesco said it planned to make its entire music catalogue DRM-free by the end of the year. It also plans to expand its service, which currently only allows customers to listen to songs on their PC, to include films and television shows.

“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," Graham Harris, Tesco's commercial director, said.

Sources at the major record labels said that that the new service indicated the continuing shift in the music industry towards offering more music to customers in so-called MP3 format, which enables tracks to be copied between devices.

"Before too long, all the big players will be offering all their music DRM-free, but at the moment you still have a situation where some services have DRM-free deals with some labels and not others," one source said.

Tesco's existing music download service, which was launched in 2004, offers just over a million songs for 79p in a format known as WMA, meaning they can only be played on PC, and cannot be transferred to media players. HMV, the bricks-and-mortar music retailer, offers a similar service.

According to Nielsen Online, the iTunes website was visited by 5.2 million UK internet users in February, as compared with 4.6 million who visited Tesco.com.

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