MusicMatch will sell music for 99 cents a download and albums for $9.99. The San Diego, Calif.-based MusicMatch says it has agreements with the five major music labels and is has 200,000 tracks available. An announcement is expected on Monday.

Since Apple (AAPL: news, chart, profile) began offering 99-cent downloads for Apple users back in April, several companies, like RealNetworks (RNWK: news, chart, profile) and BuyMusic.com have offered consumers downloads for as low as 79 cents a song.

The rise of legitimate music stores reflects the record industry's intent to offer music lovers an affordable way to buy music online, in order to prevent them from using Web sites where they can get music for free. See Net Sense: The 'real' battle is in legal downloads.

While each new music store appears to have fewer restrictions, the labels have demanded that some restrictions remain in place in the MusicMatch service. For instance, there is still a limited number of times a person can burn a list of songs onto a CD. These restrictions are designed to prevent a person from creating CDs beyond his or her circle of friends.

But unlike other services that have launched in recent months, MusicMatch boasts broader usage rights for consumers. The usage rights are also consistent across the labels, said Dennis Mudd, CEO of privately held MusicMatch. In the case of BuyMusic.com, there are inconsistent rules across the labels governing the number of times a song can be burned onto a CD, and some songs are worth as much as $1.19, said Mudd.

With MusicMatch, there is an unlimited amount of times a song can be downloaded and all songs are 99 cents.

Additionally, a user does not have to pay a monthly subscription fee. In the case of RealNetworks, a user has to subscribe to its Rhapsody music service for $9.95 per month before it can purchase songs. But for that service, a user can listen to an unlimited amount of songs.

Apple Computer's I-Tunes is only available on Apple products. With MusicMatch, the songs are available on personal computers, but not on Apple's I-Pod.

Christmas competition

By Christmas, MusicMatch, which reported $28 million in revenue last year and expects to post $40 million in revenue in 2003, is projected to have half a million tracks available for consumers to download, up from 200,000 to start with.

But by the holidays, the online music store scene will be very crowded.

RealNetworks may have its own online music store set up. Microsoft's (MSFT: news, chart, profile) MSN has told CBS MarketWatch in the past that it is considering opening up an online music store as well. Apple is expected to have its I-Tunes service available for personal computer users and not just Mac users.

Roxio (ROXI: news, chart, profile) said this past summer that it intends to start a service with 500,000 tracks by this Christmas. Amazon.com (AMZN: news, chart, profile), Viacom's (VIA: news, chart, profile) MTV and Wal-Mart (WMT: news, chart, profile) may also consider opening up online music stores, observers have said.

But even as the online music stores compete for holiday dollars, MusicMatch's Mudd believes the 99-cent price will hold as consumers seek quality and reliability of service over price.

Let the online music price wars begin.

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