Here's a post by Om Malik on the coming-soon MySpace streaming music with upsell to Amazon MP3 downloads experiment. Om thinks it will be a failure. I hope he's wrong, but the key lines from his post are:
The record labels are still not facing the proverbial music and understanding that their business model is completely broken... They need to learn that they don't need to start a company, but instead encourage a thousand others
The music labels must get out of the way of distribution - both in terms of price and rights.
My usability opinion is that any web-based streaming service is bound to fail as the music stops playing when the web page it's playing on unloads. One way around that is to pop out a player that can be minimized to the task bar, but that defeats any display advertising. Online music will only succeed when it becomes custom radio, complete with local, regional, and national audio advertising and the occasional upsell to a favorite "now playing" song or album download.
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