It seems as though Amazon is taking a hybrid approach to their digital music offering. They will offer a dedicated branded music player, to be made for them by a consumer electronics player, so that their music service will easily and seamlessly work with the Amazon player as Apple's iPod does with iTunes.
But their music service will be subscription based and not a fee per download. The subscription service will be an all you can eat one - or all you can stuff on the player.
Before the player is shipped to you, you can pre-order a bunch of music and Amazon will then use their customer preference technology to advise you on other music you may enjoy. Amazon is also taking a page out of the mobile operator play book by discounting the player if you sign up for a longer contract (maybe 12 months).
And you will be able to get discounts on Amazon CD's if you buy digital online versions. Amazon is taking an interesting approach and using their specific strengths to create some valuable USP's.
If you ask me, the extent to which they will succeed will all depend on how well their player is designed. And how coolly they market it. That has been the secret to Apple's success and no on else has managed to replicate it yet.
It will be interesting to see how Amazon does. I just question whether the Amazon brand is cool enough. Google may just fare better in this department if they ever launch a rival player/service.