So Microsoft are reported to be “actively investigating the [music] subscription model”. It would be logical addition to MSN’s premium services and they certainly have the potential to be huge, but equally there’s no reason for the likes of Napster to be overly concerned either. The bottom line is that Microsoft are a software company and software business concerns will always trump content business concerns. If Microsoft were to try to become a market leading music service, they would do so at the expense of software customers who use WMA and WDRM for their services e.g. Naspter, HMV, Wippit, the numerous OD2 / Loudeye services etc. If those partners jumped ship to alternative formats it would a) represent a loss in earnings and (more importantly) b) could weaken Microsoft’s footprint in the audio format/DRM wars. And of course, Microsoft are already in the digital music space in Europe with their OD2 / Loudeye powered MSN music service in various European countries. They’ve already been carefully treading the fine line between developing an added value service for the MSN audience, without pushing it too hard so that it overshadows Napster et al.
If Microsoft launch a music subscription service it would be a valuable addition to the digital music market, but I think it is unlikely that it will become the de facto market.