Speaking to the Telegraph, executive producer of MSN Peter Bale has revealed that Microsoft is gearing up to launch a streaming music service before the end of the month. Without going much into details, Bale said the service will perform similarly to Spotify, a streaming music service available only in Europe which offers both an ad-supported listening option as well as a premium subscription with no ads (similar to Pandora in the US). Microsoft is still examining how their business model will work, though.

The new service is expected to tie directly into Microsoft’s music player, Zune, which already offers a $15 per month “all you can eat” music subscription option. Dubbed Zune Pass, this service offers an unlimited amount of downloads and allows customers to permanently keep 10 tracks every month at no extra cost, even after they cancel their subscription.

The new music streaming service is going to be tested first in the UK, with no word yet on a US launch. Bale also hinted the upcoming offering could be tied in with the Xbox 360 gaming console, but would not be drawn on the details of how a partnership would work.