This would be the third time I recall that a major vendor has shut down a DRM service and stripped customers of all their products.
AppleInsider | Yahoo! Music's death at age 3 warns of DRM's risk
... Yahoo did its best to stage a rival to Apple Inc.'s iTunes, but after three years of lagging results, the Internet icon is putting its Yahoo! Music service to rest and leaving subscribers with copy-protected music libraries that can't be transferred to new computers...
Due the vagaries of computer life, within a year much of that music will be gone. Yahoo is telling users to burn CDs from the music. Anyone who's ever tried to do this will know what an inane idea that is. It's prohibitively time consuming, and future lossy compression of that music will generally produce awful results.
When Microsoft/MSN (? or was it AOL?) did something similar I think they refunded customer money, though that only works for people with current accounts.
They key lesson is that when you buy a used CD for $3 you have access to that material for an unlimited amount of time. When you buy the same CD new on iTunes for $14 you have use until Apple closes its FairPlay servers, or until it changes your iTunes contract.
We live in an age of transience. I suspect a younger generation will simply accept this as the way things are.
Incidentally, there's a cruel surprise slowly being uncovered. A surprise, that is, to the vast majority of people who don't bother thinking about DRM.
Lots of families are going to have multiple iPhones (great phone, fascinating computer, lousy PDA, Outlook sync broken, don't touch MobileMe before November, wait for 2.1 if you can).
They'll expect they can sync all their iPhones to what they think of as the family music and video library.
Cue evil laughter.
They'll discover then that an iPhone is a personal device, and it must sync to an individual user account. They will also discover that Apple's DRMd music and videos are owned by an Apple username, not a family. Lastly, they'll discover that iTunes libraries are personal libraries, not family libraries.
Slowly they'll realize the jaws are closing around them. They need to buy a copy of each video and song for each member of the family. [1] Eventually, they'll see the shape of a BrainLocked future, where we pay to keep access to our own memories...
[1] There used to be a workaround for non-DRMd iTunes media, but I've not tested it on iTunes 7.7. Sooner or later Apple will close the door on this; my transient DRM optimism has faded. I don't think Americans are going to figure this one out. Maybe the EUs will twig to this, and put some serious laws in place.
Update: Recently Apple terminated its .Mac web page authoring tools. All .Mac web pages are now inaccessible. For a scary moment I thought Google had done the same thing with my old Google Pages. Turns out they're only close to gone. Dang, but I sure as shootin' don't trust that cloud.
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