Instead, said Bronfman, Warner will focus on licensing to pay subscription services. "The number of potential subscribers dwarfs the number of people who are actually purchasing music on iTunes," he told BBC News. Free streaming services still pay royalties for each song played, usually supported by ads. But Bronfman contends that those royalties are far less than what Warner earns on download sales or from its cut of a monthly subscription.

Though Warner seems opposed to the free, ad-supported streaming model (not unlike radio, where record labels get no royalties), other major labels aren't in agreement. "Spotify is a very sustainable financial model—full stop," Rob Wells, senior vice president of Universal Music Group International, told BBC News in January.

Paid music subscriptions have been available for years, and have yet to prove as popular, or as lucrative, as selling downloads through services like the iTunes Store. Online sales were a full 20 percent of Warner's revenue last quarter, with digital revenue up 8 percent year-over-year, but CD sales continue to plummet. The music industry in general is still in the middle of a huge transition, and it seems premature to abandon streaming services that are free to end users.

"On-demand, access based services will be the foundation stone of the 21st century music business," Forrester analyst Mark Mulligan wrote on Forrester's consumer product strategy blog. "Added to that, the majority of consumers simply have no appetite for paying for digital music, certainly not on a subscription basis. Free and subsidized services are quite simply part of the future."

Jon Webster, the head of UK's Music Managers' Forum, agrees that any service that stems out-and-out piracy is a net win for artists and labels. "New media has to give the consumer what they want and the consumer is in a world where they want things right here, right now—and if you don't give it to them, they'll steal it," he told BBC News.

"Anything that's going backwards is denying where the world's going," Webster said.

Further reading