Subscription services, on the other hand, have typically applied heavy-handed locks that make it difficult to move files from a PC in their downloaded form, and the services may charge extra for the right to burn songs to a CD or transfer them to a device. As of last week, at least one record label executive was ready to declare closely restricted subscription services a failure already: "I don't see the model becoming a significant part of the music industry," he said. To be sure, it's too early to call Apple a winner in the online music market, which is still in its formative stages. Many label representatives believe the industry may gravitate toward a hybrid model that marries some elements of a download store and other elements drawn from subscription services. Subscription services are "ahead of their time" according to a senior executive at another record label, who said a key stumbling block is providing unlimited access to subscription music away from the PC on portable music players and other devices. "Ultimately, there will be a huge audience for this, but the services need to provide portability," he said. "Downloads are very close to an old-fashioned experience," he added. "Subscriptions are much more of a shift... but the technology isn't right for the shift to happen. We're hoping it will happen this year, that the technology companies will provide portable players that can play the music." Microsoft's Usher said that Windows Media already supports secure playback on some 15 portable music players, including the Diamond Rio, but only for songs that are purchased, not rented. He said the company is continuing to work on enhancements to support subscription services on devices. Microsoft plans to add support for a clock in portable music players and other consumer-electronics devices. The clock would provide a "time out" feature much like that used in PC versions of its DRM software. If customers don't pay their monthly subscription bills by a certain date, access to the files on those devices is cut off. Time-outs can be supported relatively easily on PCs, which have plenty of memory and processing power to handle a clock and the associated DRM. But supporting clock DRM on small handheld devices poses a considerable engineering challenge, thanks to limited CPU resources and battery life. Usher said Microsoft is working with consumer-electronics device makers to add clocks that can be hooked up to its rights-management system. "It's taken longer than we originally intended," Usher said, confirming that Microsoft had originally planned to release a security upgrade in January. Usher said the company's DRM technology is flexible enough to be used in numerous music schemes, including $1 download stores like Apple's. He added that he's confident consumers eventually will warm up to subscription services once they support wider copying rights and their value is better understood. "We already support a couple of business models," Usher said. "The other part of the business model that gets interesting is, what about unlimited downloads? The Apple store is not looking at or supporting anything like that." News.com's John Borland contributed to this report.
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