More and more Chinese are turning to the Internet to download their favorite music.

It is rush hour and Beijing's subway crush reflects this. Han Song, a frequent traveler between Dongzhimen and Guomao, fights his way to a corner. Sandwiched by the crowds, he reaches for the bag held high above his head and takes out his iPod.

He slides the wheel on the slim gadget, no larger than his palm, and picks one of the more than 1,000 tracks on it. It is enough to distract him on yet another trip.

The mainland's young music fans are increasingly downloading music to cell phones and other music players, thanks to new technology.

"I can download any kind of music from around the world on the Web and enjoy the tracks anywhere," Han says. "It has become a habit." His latest downloads are songs by Hong Kong pop singer Karen Mok and pop group S.H.E.

All of this comes at a time when fans are faced with a wealth of new choices on how to buy and listen to music.

Before MP3, the Internet and unbridled music piracy, music distribution was dominated by the big record labels. Fans would congregate at midnight at local music stores to get the latest album of their favorite singers.

"Buying CDs is a little old-fashioned. I don't buy CDs as regularly as I used to four or five years ago. CDs have become more of a collection or gift item," says Han.

The trend is not lost on Song Ke who noticed it years ago, when he was deputy manager at Warner Music. He left in 2000 and started his own business, Beijing-based Taihe Rye Music. The company was the first to start digital music publishing in China.

"Back in those days, singers promoted by the music labels were the ones everyone paid attention to," Song recalls. "But changing habits have led music fans to the virtual world. With CD sales down and the digital side growing, you have a different business model. The major labels are looking for new revenue streams, including ringtones."

When Taihe Rye released mainland singer Dao Lang's five singles on the Internet in 2003, it saw more than 5 million downloads and raked in more than 2 million yuan ($292,000) in profits.

The company also put Super Girl champion Li Yuchun's debut album Happy Winter online in 2006 and made more than 1 million yuan ($146,000). The total revenues from digital music sales, especially cell phone downloading, account for up to 80 percent of the company's income, according to Song.

The market potential in this segment is drawing others. Shenzhen-based A8 Digital Music Holdings owns more than 60,000 original works of music on the mainland. It has designed the A8 Box software to enable mobile users to easily access and buy content from its large online database and various digital music service providers.