The Internet radio market is about to get more crowded. 7digital announced Thursday a new streaming radio solution that will help smaller services better compete with names like Pandora, Clear Channel and Apple.

The service provides an enhanced API and capabilities that allow companies to launch their own DMCA-compliant Internet radio service in the United States. 7digital partners — from music startups to brands — will have access to the company’s entire catalog of over 23 million tracks. 7digital will handle the reporting of digital performance royalties to SoundExchange.

Vickie Nauman, 7digital President – North America, says the company chose to create a radio solution after receiving requests to help powering the backend of a DMCA-compliant radio service.

With Pandora going mainstream, iHeartRadio grabbing a large share of the U.S. Internet market and Apple about to launch its own radio service, the company saw a need for a solution aimed at smaller companies. A number of radio services are already powered by 7digital: doubleTwist’s Magic Radio for Android, Senzari’s Wah Wah, Turntable.fm, Piki and Sourcetone.

A 7digital partner will have the ability to integrate MP3 purchases from 7digital into their Internet radio services so listeners don’t have to migrate to another site or app. Purchased tracks will be kept in the buyer’s 7digital locker to minimize disruption to the listening experience. The revenue share will be “more aggressive” than the 5% offered by other download stores, according to Nauman.

Integrated purchasing could have a big impact. Nauman says internal research shows integrated purchasing has a conversion rate ten times better than a system that requires the buyer to purchase at a different site or app. This method of purchasing from a radio service is likely to become more common after Apple launches a radio service that integrates iTunes purchasing into the radio app. [Billboard.biz]