We7 is rolling out its full music service, after a year of beta testing of the audio and digital advertising-funded model.

The digital music service has all four majors and hundreds of independent labels via The Orchard on board. We7 compensates rights holders and artists from ad revenues.

The Oxford–based company allows free on-demand access to full tracks and albums for streaming, and users can also create playlists and share favorites with friends.

The site also allows users to purchase downloads in MP3 format to keep, although not all tracks available for streaming are available to be purchased yet. The company says around 50% are available to buy DRM-free and the rest will become available in the next 90 days; until then, an iTunes link appears next to those tracks.

We7 says its ‘celestial jukebox’ streaming service has three million licensed tracks, including new releases. The ‘play anywhere’ feature allows blogs and Web sites to use widgets to link to tracks or artists on We7.

Peter Gabriel is a founder investor and board member of We7.

"It was just 18 months ago that we had the dream of delivering great music that's free and legal for consumers and where artists and rights owners get paid,” said CEO Steve Purdham in a statement. “We7 has great music and that builds great audiences which will be highly valuable to brands and advertisers.”

Geoff Taylor, chief executive at U.K music industry trade body the BPI, added: "Record labels are licensing a wide variety of new business models so music fans can access the music they want, when, how and where they want it, while respecting the rights of artists.

“We7 is a very good example of how the music business is leading the digital content revolution. But for digital entrepreneurs like We7 to continue innovating and investing in new services for consumers, we must tackle illegal downloading, which undermines the business case for all legal services.”

The We7 service works by targeting users, based on their sign-up details, with audio ads that precede the free music tracks and digital ads.