Skype founders Niklas Zennstrom and Janus Friis have launched an online service that sells monthly music subscriptions.
Zennstrom and Friis previously founded music-sharing website Kazaa, which settled litigation with the music industry in 2006.
The new Rdio service sells subscriptions of between $4.99 and $9.99 a month, depending on the device used, to access more than five million songs.
The service will include social features that let users read each other's reviews, browse other people's music collections, and follow information about their favourite bands.
Zennstrom and Friis believe the download model is going away and consumers will move to collections of songs that reside on remote servers, rather than on a user's computer or other device.
Analysts have said Rdio will have to create a unique experience to differentiate itself from competitors.
They have also speculated that Apple will start a subscription service using steaming technology acquired through buying Lala in December to complement its iTunes store that sells music downloads.