According to the New York Times today, I was wrong. The service will allow users to determine what media to download from each individual device. In other words, from your iPhone, you go to Settings, then to Store and can set it what will be downloaded to your specifications.
I am somewhat surprised that the music business has not tried to force the differentiation between streaming and mechanical royalties - unless it has with Apple, but it will not be reflected in the price charged to consumers. I think this is pretty cool and reflects how technology has made such distinctions less important, but it was a major revenue driver for the publishers who receive over 9 cents per song copy.
Regardless, Apple will have the opportunity to charge for new music "subscriptions" a la Rdio, Napster, Spotify, et al.
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