US digital music service Rhapsody is the latest company to embrace MP3 downloads without copy restrictions.
Songs from all the four leading record labels - Universal, EMI, Sony and Warner - will be available in the digital format.
Rhapsody joins Napster and Amazon, who have all started offering MP3 files in recent months.
"We're no longer competing with the iPod. We're embracing it," said Neil Smith, vice president at the firm.
Until recently, Rhapsody, which is owned by Real and MTV, had focused on a subscription service, which allowed users to stream an unlimited number of songs for between $13 (£6.50) and $15 (£7.50) a month.
Streamed songs
Rhapsody's streamed songs do not play on Apple's iPod, the world's most popular MP3 player.
The subscription service will continue to run alongside the MP3 download store.
The majority of MP3 tracks will cost 99 cents (50p), while albums will sell for $9.99 (£5).
The shift comes as the British record industry announced that digital sales were going "from strength to strength".
The BPI reported that digital formats now account for about 85% of all UK Top 20 singles sales.
More than 200 million downloads have now been sold in the UK since the launch of the first mainstream stores in early 2004. In total, digital formats now account for 8.6% of all UK record company sales income.
