[Update: It seems the Financial Times wasn't entirely on the money with this one. Today at IFA, Sony did announce a new service, but it's not what was originally rumored.
It's called Music Unlimited Powered by Qriocity, a cloud-based digital music service that can be accessed by the PS3, Bravia televisions, Blu-ray disc players, Blu-ray home theater systems, and VAIO computers. Details on the service (which should launch later this year), including pricing and availability, have yet to be revealed, but it looks like a Europe-only affair for the time being.]
According to the Financial Times, Sony is set to announce a music and video service to compete with iTunes for PlayStation 3 and PlayStation Portable. The report states that the service may be revealed as early as today.
According to the report, "sources in the media industry" are saying that the service will be subscription based, and will be unveiled at the IFA technology show in Berlin. The source points to the PS3 and PSP for the launch, with Sony adding other devices -- such as Bravia TVs, mobile phones, and Sony laptops -- in the future.
As for when the service will launch, the sources say it won't be available until 2011.
Report: Sony to introduce iTunes Competitor on PS3, PSP [1UP - Thanks, Vallanthaz!]