The obvious long term result is Spotify, Last.fm, Netflix etc are going to dump apple. Then a new company will resell Last.fm content at a 40% markup to sidestep the apple rules. Bad PR is then going to force apple to rethink their stance.

However, I expect Apple is going to offer "deals" to the major players.

I think Apple will be happy to have all the music subscription apps go away. They bought lala.com and I expect them to have an iTunes subscription service before long.

Author here.

I've put 'co-founder' back into the post's title -- sorry about the ambiguity.

You know, just putting co-founder in the title doesn't actually explain that he's not with the company anymore... it just means founded it with someone else (unless co-founder means someone who founded a company with someone and then left? could be my bad english failing me..)

No, your English isn't failing you; you're correct! It doesn't explain that he has since left Last.fm.