Australian news source The Age reports that a local version of Apple's iTunes Music Store "is likely" to launch before Christmas.

Australian firm Telstra is working on a licensing deal with at least one record company, says the report.

Apple iTunes Music Store has raised the bar for online digital music retail, putting ease-of-use, consumer rights and single track downloads firmly on the agenda. The service is only available in the US at present while Apple focuses development on bringing in content from the independent labels and developing a Windows version of the service. Apple has confirmed it plans to release iTunes for Windows before the end of the year.

Introducing such a service to Australia will require complex regional licensing deals, the report confirms. But it's necessary because the future of the music business is at stake, says The Age.

Digital music piracy through existing file sharing networks is claimed to be responsible for a ten per cent decrease in annual music business revenues, it is claimed.

The Recording Industry Association of America (RIAA) is engaged in prosecuting individual file traders, but this policy has been criticised, with an analyst last week calling it a "flawed strategy". While file trading network activity has declined 22 per cent since the RIAA began pursuing individuals, CD sales have also shrunk.

The Age reports Australian Recording Industry Association CEO Stephen Peach who says anti-piracy prosecutions will continue but the industry recognizes the revolution and will respond.