But BMG announced an agreement with San Francisco startup MusicBank that will enable the users to stream music from a personal music collection on demand. The service will allow music to be instantly "beamed" into a virtual storage locker from either online or offline retail stores.

"We have wanted to be involved in on-demand digital streaming for some time," said Kevin Conroy, chief marketing officer and president of new technology for BMG Entertainment. "We've been in discussions with MP3.com and MusicBank, but we chose MusicBank because they offer a very innovative service which will provide fans convenient access to their favorite music from BMG's artists."

According to Conroy, technical engineers from the label have been working with MusicBank for several months to create a secure environment for streaming.

The MusicBank service mirrors my.mp3.com, MP3.com's application that allows registered users to access music from the company's database of encoded music. Before users can have the music streamed to them, they have to load a physical CD that contains the album into their computer to prove they own the music.

Like MP3.com, MusicBank has compiled a database of roughly 100,000 albums, but CEO Michael Downing said the music will not be streamed until his company has obtained all of the necessary licenses from EMI, Warner Music, Sony Music, and the Universal Music Group.

MP3.com stopped streaming major-label music in May after it lost a copyright infringement lawsuit to the Recording Industry Association of America.

But Downing said that his service actually provides the novice Internet user with safe and legal access to major-label content. At the company's launch this August, users will be able to move music purchased online directly into a virtual storage locker. Downing said that in September, traditional retail outlets would have the ability to move music into the virtual music locker as well.

"There has been a split between the benefits from the illegal models out there for delivering streamed music and the comfortable process of purchasing a CD," said Michael Downing, co-founder, president and CEO of MusicBank. "We are trying to go after the mass market, not people engaging in the download market. We are going after the mass audience who may not have had any experience in ripping CDs."