Canada's largest traditional retailer of music, HMV Canada announced yesterday that it had opened its own online music store.

The company says it will offer over a million songs in the MP3 format, free of any copyright protection.

Digital Home visited the site in order to compare HMV's offering against Canada's number one online music retailer, iTunes and we were pleasantly surprised at what we found.

Digital Home took the top three selling albums on iTunes and compared pricing on the HMV store and iTunes. The top three selling albums on iTunes were Play On by Carrie Underwood, Glee - The Music Volume 1 by the Glee Cast and Raditude by Weezer which were priced at $9.99, $12.99 and $9.99 respectively. Individual songs on each album were priced at $1.29.

On HMV, all three albums were $9.99 with the majority of individual songs priced at 99 cents each. The more popular songs from each album were priced at $1.29 per song. HMV clearly had the price advantage on top selling albums.

Looking at singles, both sites were selling top singles for $1.29 per song.

Finally we decided to check some back catalogue and chose one of rocks best all-time selling albums, Pink Floyd’s “Dark Side of the Moon”. The price at iTunes was $9.99 vs. $10.99 at HMV.

After reviewing the HMV site, we concluded that neither iTunes nor HMV has the best deals on everything so it pays to shop around.

The only significant difference between HMV and ITunes is the way each encodes its songs. Songs from HMV are encoded in MP3 320Kbs while songs from Apple are encoded in AAC 256Kbs.

Comment below or discus in our HMV Canada launches MP3 Download store discussion thread.