Yahoo is paying $160 million for San Diego-based Music Match. With it, Yahoo gets 225,000 subscribers who pay $8 per month for the all-you-can-eat subscription service that offers 700,000 songs to computer users. This is similar to RealNetworks Rhapsody service, which has more than 550,000 subscribers. Napster is the first to offer an all-you-can eat portable service, which utilizes DRM technology from Microsoft to allow you to “rent” all this music and play it on your portable device–but it will expire if you discontinue your subscription. This model is far superior to the pay-per-download model–a better value for consumers and an annuity for the provider.
With Yahoo buying into the subscription model, and with Microsoft aggressively promoting its Janus DRM service, I think the demise of pay-per-download services (like iTunes) is accelerating.