Microsoft Corp. gave a sneak peek of its music download service today (March 18) to about 100 indie label executives at the South by Southwest festival in Austin, Texas. The software giant's offering

Microsoft Corp. gave a sneak peek of its music download service today (March 18) to about 100 indie label executives at the South by Southwest festival in Austin, Texas. The software giant's offering will compete with the likes of Apple Computer's iTunes Music Store and Roxio's Napster.

To be offered through online unit MSN, the service isn't slated to launch until fall at the earliest, and the company has been quiet on its details. Therefore, the event here served a number of purposes: to sign up labels for the service, get input while it is still in the pre-beta testing stage and to create anticipation.

"Generally, we just wanted people to get excited that something's coming; that they're going to have other opportunities out there," Christine Andrews, MSN product manager, tells Billboard.biz in an exclusive interview.

"There's no question that there are some powerful companies already out there that have offered a music download service, but we wanted to get the [indie labels'] feedback and we're going to incorporate what we can and we want them to know we're flexible [in promoting and packaging the music]."

Microsoft has been meeting with major labels about the new system -- officially called the MSN Music Service -- for several months. According to a source, negotiations with most majors are in their final stages. The goal is to launch with between 700,000 and a million titles of all musical genres.

Though the service is a late entry into the legal online download derby, sources say Microsoft plans to tout its compatibility with other digital music plans, via the company's Windows operating-system software.

"If you're on Windows Media Planner and you like Napster today or you like someone else and you download some music there, then you want to come onto MSN's new service, MSN is going to make it simple and vice versa," says a source. "It really will become this great eco-system on Windows where you can pick a service that you like and MSN Music Service competes on the merits."

Additionally, the MSN Music Service will be compatible with most portable music players, the exception being Apple's iPod. Microsoft's own Portable Media Center device will bow later this year.

Initially, the downloads will be available á la carte, but Microsoft is examining other delivery plans. "We're looking at what will be the better model for the labels so that we're getting their music out," Andrews says. "We're looking at multiple options."

A number of details are still to be determined, including whether MSN Music Service will be bundled into Windows software or if it will available separately. A price point for individual downloads has not yet been set.

Similar to iTunes, which has just surpassed the 50 million download mark, sources say it's unlikely that MSN would make money through the sale of music. Instead, it hopes to profit by offering consumers premium services -- including anti-virus protection and storage plans -- in conjunction with the music service, as well as by boosting sales of its Windows software.

"The goal for Microsoft is to deliver a great integrated user experience for people," says a source. "Microsoft has a new search service coming that will be competitive with Yahoo! and Google. It's clear that a large number of searches today are for music. The company that will do well is the one where people can search and then connect right to where they want to get and then can act on that."