Microsoft's Zune set to challenge iTunes and Spotify

A new version of Zune, Microsoft's download and streaming service for music and video, has launched to coincide with the launch of Windows Phone 7 on 21 October.

Zune has had limited success in the online music market. The service is set to get a major marketing boost as it comes included on all Windows Phone 7 devices as part of the music and video hub.

New features in version 4.7 of the software include HD video streaming on home PCs, synchronisation of media between devices, and parental controls to manage what is downloaded or streamed to mobile devices.

Customers in the US, UK, France, Italy, Germany and Spain will also be able to sign up to Zune Marketplace. This offers music and video content that can either be downloaded or streamed, with unlimited access is available for £8.99 a month.

In a very competitive market, Microsoft's increased presence will provide further competition to services such as Apple’s iTunes and Spotify.

According to Spotify’s Jim Butcher, this can only be a good thing. Speaking to Computeractive he said: "We recently partnered up with Microsoft to launch on the Windows phone too, as we continue to make Spotify available on as many products as possible.

"The biggest threat to the industry is piracy. With 19 out of every 20 tracks downloaded illegally, every person we draw into high-quality legal music services and generate lost revenues, that's another step towards helping rebuild the industry. We need to all work together to make that happen - so good luck to Zune!"