Music streaming and download service We7 has announced a new offering to help it compete with rivals such as Spotify and iTunes.

The company, which is backed by backed by Peter Gabriel, Eden Venture and Spark Ventures, has announced a personalised internet radio service as part of its latest relaunch. The Internet Radio Plus feature will work in a similar way to Last.fm and US-based service Pandora so that as well as allowing users to songs and albums, We7 can also now provide radio-style webcasts tailored to each individual’s tastes.

We7 claims it currently has three million users per month in the UK, though admits that fewer than 10,000 of those are paying subscribers. In contrast, Swedish company Spotify has 500,000 paying subscribers across Europe.

Users can also share their ‘loved’ stations with friends on Facebook, Twitter or via email.

We7 chief executive Steve Purdham said: “This is a massive hint on how people want to listen to music. The on-demand function will still be there. We’re not taking anything away – we’re just changing the emphasis because the consumer has said, ‘This is the way I prefer to listen to my music’.”