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Digital Music Pipe Dream

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We can't always get what we want.

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A subscription service with high-definition mobile streaming.

It's a business model that should work: Rather than a high-capacity MP3 player holding all your meticulously organized music, you'd have a Wi-Fi media device that connects to an online "cloud" and streams any song or video you like directly into your ears. For a flat monthly rate, you can create an online song library of unlimited selection that you or a friend can access and immediately play from a mobile device.

It's an exciting prospect, and one that completely negates the need for storage upgrades and at-home synching: A mash-up of iPods, satellite radio, and Facebook.

So where is it? And why have existing subscription music services -- like Napster, Rhapsody (RNWK) and Microsoft's (MSFT) Zune -- failed to make progress in this format?

The answer: A mixture of poor planning, digital rights, personal preference and inadequate technology.

For starters, the present subscription model needs an overhaul. Users haven't exactly flocked to the prospect of unlimited downloads for $12 to $15 per month. We already have that service for free. It's called BitTorrent.

Whether it's shamefully admitted or angrily pointed out, illegal downloading is beyond anyone's control. And if these services continue to offer nothing unique to sweeten the deal, the target audience (read: college students) would much rather keep their 15 bucks.

Digital rights management (DRM) is also a huge issue. DRM encrypts MP3s and prevents universal access to songs purchased online. It also causes major headaches.

This year, Wal-Mart (WMT), Yahoo (YHOO) and MSN each did some serious back-pedaling after announcing they were shutting down their DRM servers. For existing customers with DRM-addled music, their ability to play those files was dependent on these companies keeping their license key servers online. No approved DRM check: No song access.

Yahoo compensated users with refunds and coupons for the newer DRM-free music, but the other two just extended their DRM server access - along with Wal-Mart's laughable suggestion to burn the songs to audio CD. (Converting and burning hundreds of MP3s? Goodbye, social life!) Though dropping DRM was a good idea, merely adopting it in the first place has always been a mistake.
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