Microsoft's attempt to pull together its very own music subscription service have foundered, as the company failed to reach a deal that undercuts other players in the segment.

The company had been expected to launch such a service in its attempt to find an entry-point to the market likely to steal market share from iTunes Music Store.

Subscription services are presently dwarfed by the success of digital-music download services.

Citing unnamed "sources", the news broke in this morning's Wall Street Journal (WSJ). It appears the giant Redmond company has broken off discussions with the four major labels - EMI, Sony BMG, Universal and Warners.

Negotiations collapsed on Friday. The labels wanted royalty payments of $6-$8 per user per month, which "people close to the labels say is in line with what existing subscription services pay", the report claims.

Microsoft wanted to pay less than that, and has now "indefinitely postponed" plans to launch a subscription service, according to the WSJ.