The music industry is an area which perhaps more than any other has been forced into change by emerging technology. A few years ago, buying a "record" as it used to be called involved visiting a shop and paying up to £15 for an album by a topselling artist.

Now you are unfortunate to pay more than £9 for the same thing thanks to massive competition from the limitless seam of digital technology.

For a while this was seen as bad news for the industry as less cash for the labels meant a smaller cut for the artist.

But now it is seen as an opportunity. More and more of us are becoming swiched on to recent formats driven through computers and, usually, onto MP3 players which slip into a pocket and provide hundreds of songs with good sound quality.

So while music is available at a lower price, it is far easier than before to access. Simply log on to a website such as Apple's iTunes and download it for far less than it costs in the shops.

And artists such as Oxford's Radiohead and even Cliff Richard are offering their latest offerings for as much as the curious listener may want to pay.

Some will pay 50p, others £5, but commercially it is possible to see the sense behind it.

The problem for the industry is that of course it is possible to go to so-called "free" sites and download music for nothing - illegally of course.

Despite that these websites are popular and difficult to crack down on.

But now Oxford company We7 is offering downloads for nothing - legally.

How? The answer lies with a small advert which is downloaded at the same time as the music.

This provides We7 with the cash to pay the artist and, as long as the music lover can put up with ten seconds of advertising, then everybody is happy, especially as the advert can be removed at a later date.

Chief technology officer Gareth Reakes said: "We have got about 150,000 tracks on the site and it is going from strength to strength.

"It means music can be downloaded free without having to use illegal sites and the artists still get paid."

We7 has so far attracted £1.6m of venture capital funding and was recently selected as one of 24 finalists in the English Tech Tour, a contest to match promising young technology firms with investors' cash.

Heading it up is chief executive Steve Purdham, who recently sold his previous firm, Internet software filtering company Surfcontrol, while another investor is former Genesis front man Peter Gabriel.

The firm is also looking to get the green light from major record labels to carry their artists and catalogues with the UK's largest independent label, Sanctuary, already on board.

Another feature of the website is that unsigned up-and-coming bands will be able to upload their music for others to listen to. They will also be paid royalties in the same way as established artists.

Mr Reakes added: "Peter Gabriel is very keen to find new ways of helping people wanting to get into the music business and there are already more than 2,000 artists in the system.

"We have had more than 50 artists upload in a week."

Mr Reakes, 31, an information technology graduate of Oxford Brookes University, believes We7 will be part of a rapidly changing music industry.

And because of its nature and the power of the Internet as a communication tool, it has had to do very little marketing.

It has rapidly identified an audience of people between the ages of 20 and 50, with the majority being men.

Mr Reakes said: "People have MP3s on their mobile telephones now or even on their satellite navigation systems."

The boundaries of the music industry are constantly being pushed back and Mr Reakes is hoping the beauty of the system is that the more technology develops, the more relevant We7 will become.

He said: "No-one has done this before, so we have to prove the model works by attracting advertising."