From Businessweek :

BusinessWeek has learned that Morris has already enlisted Sony BMG Music Entertainment as a potential partner and is talking to Warner Music Group. Together the three would control about 75% of the music sold in the U.S. Besides competing head-on with Apple Inc.'s music store, Morris and his allies hope to move digital music beyond the iPod-iTunes universe by nurturing the likes of Microsoft's Zune media player and Sony's PlayStation and by working with the wireless carriers. The service, which is one of several initiatives the music majors are considering to help reverse sliding sales, will be called Total Music.

[...]

While the details are in flux, insiders say Morris & Co. have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that's essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would move many more players. 

[...]

The big question is whether the makers of music players and phones can charge enough to cover the cost of baking in the subscription. Under one scenario industry insiders figure the cost per player would amount to about $90. They arrived at that number by assuming people hang on to a music player or phone for 18 months before upgrading. Eighteen times a $5 subscription fee equals $90. There is precedent here. When Microsoft was looking to launch a subscription service for Zune, Morris played hardball. He got the tech giant to fork over $1 for every player sold, plus royalties. Total Music would take that concept even further. "If the object is to wrest control of the market from Steve Jobs," says Gartner analyst Mike McGuire, "this is a credible way to try it."

Microsoft has also though in the past a model to charge for the subscription plan and sell the player for free or very cheap. But as we now know Zune decided to play in the $150+ price region which is far to high to be absorbed by a subscription plan, like cell phones have. The model UMG thinks about is the exact opposite and possible to be absorbed by expensive players. I don't believe people would like to buy a $50 player for $140 to get a free subscription plan, but in the $250 price region Zune 80 resides a part of the $90 fee could be absorbed by Microsoft and the rest by the consumer.

Related articles:
UMG likes short term contracts (When it comes to iTunes)
The new Business Model of UMG?
Zune for free with a phone-like plan?
Microsoft gives revenue to Universal