Would you buy a song if you could stream it an unlimited number of times from your iPhone or a web browser? Maybe not. What if the cost was only 10 cents? Not only does this free up your disk space, it's light on your wallet.
Lulu is counting on these two things to make them lots of money. They currently have 8.5 million songs in their library. Instead of having a music collection of files, everything you paid to play resides on remote servers until you demand a listen.