Have they been drinking shoe pollish or something?
This has to be the stupidest thing they have come up with yet!
$5 monthly subscription? So it's going to have some kind of DRM (Windows I expect) and not Apple's DRM (and US only no doubt) . So it's not going to affect iTunes at all, people who like iPods will not be able to use it. Will people buy some other player just to get the "free" music? Well that "free" music is just going to be added to the price of the player. A SanDisk 4 GB is about $100, and iPod nano 4 GB is about $150 at best buy... now if they add the cost of a one year subscription to the price ($60) by the time the store markup it's going to be about $200 for the SanDisk player, like that will sell!
How long will the vendor keep paying?
If they want to put the boots to Apple there is only one way. Sell MP3 tracks that will play on anything including iPods. Sell for equal or less then iTunes, and don't have stupid US only limits.