FORECAST: CLOUDY, WITH A CHANCE OF SUBSCRIPTIONS

First came the surprising news that Apple had approved a new version of Rhapsody’s iPhone app, enabling iPhone, iPad and iPod touch owners to stream the service’s 9 million-song catalog. As I.B. Bad pointed out, Apple’s willingness to let a rival (though hardly a threat) had some observers speculating that the move will serve as a no-risk way for Steve Jobs and company to test the appeal of the subscription model before launching their own service, using an upgraded version of the technology the company picked up with the acquisition of Lala. But this unfolding story appears to be more complex than a possible reboot of the subscription model.

Meanwhile, Spotify, the much-hyped European subscription service that still does not have a U.S. release date, unveiled a host of new features, many of which are designed to make the player a user's destination for hosting and sharing music. Spotify remains available in just a handful of European territories, but has already boasted more than 7 million users, and the update will bolster their accounts with added social networking features—specifically, integrating Spotify with Facebook, whose iLike music feature is one of the mighty site’s least impressive aspects..

But perhaps the most enticing new addition is what Spotify has deemed "The Library," as the L.A. Times pointed out. In short, the feature will scan the music on a user's hard drive—which for most will mean their iTunes libraries—and allow it to be accessed directly via Spotify. With Spotify, a user's long-accumulated collection of music could now stand alongside everything available on the service, creating less of a distinction between the music that is owned and stored on Spotify, and thereby allowing subscribers to use Spotify as a full-on music management service.

Spotify’s Library lives in the much-ballyhooed cloud, where music can be stored, accessed and copied on the servers of the host company.

Spotify creator Daniel Ek described his goals earlier this year. "We want to be the platform where you organize your music,” he was quoted as saying in another L.A. Times story. “This is the cloud that everyone is talking about... It's sort of like the world's biggest music library on one hand and digital mixtapes on the other hand." What's more, the story noted, it gives the music industry something it has sorely lacked in the digital marketplace: control.

Spotify is based on the ad-supported freemium model, which offers free streaming, with the premium tier offering higher-quality audio streams and the ability to download and play songs on their smart phones, for a monthly fee of 10 euros (about $13). Subscribers also have the ability to listen to music when not logged into the service, and they’ll now have the ability to access their entire collections via Spotify's mobile phone apps.

As the L.A. Times story points out, Spotify's ambitions to merge and host a user's collection have the potential to reshape the music market—if, of course, labels and publishers can come to an agreement with Spotify and actually make it available.

But there’s much resistance among the Big Four to the concept of people accessing their music without paying for it—and Spotify reportedly has a free-to-premium rate of just 5% in the European territories where it’s offered, which American execs figure would parallel adoption of the pay version stateside. Not only that, but the labels are fully aware of Apple’s power and aggressively innovative momentum, and if some executives regret having made concessions to Jobs prior to the launch of the iTunes Store in 2003, they’re also well aware of how well Apple has performed as a 21st century music retailer as well as the primary maker of listening devices.

Given that recognition, the music biz seems far more likely to play ball with Apple in its own assumed ambitions—intimated by the news late last week that its shutting down Lala on May 31—regarding the launch of a free-standing iTunes.com, the storage of users’ iTunes liberates in the cloud and some sort of streaming service of its own. These moves, which mirror those of Spotify, seem far more likely to get the OK of the Big Four than the ambitions of the Swedish company, in the sense of “the devil you know.”

We’ll be watching these interconnected unfolding stories with great interest—and so will the rest of the world.