From this article in Rolling Stone:
The company has kept details of the Microsoft music store under wraps and declined to comment for this article. But according to sources close to Microsoft, the store will open to the public with somewhere between 600,000 and 700,000 tracks for sale at ninety-nine cents apiece. Within a couple of months, it will match Apple's 1 million offerings. Reports that Microsoft will use its financial clout to become the first site to offer the Beatles catalog (the band reportedly demands tens of millions of dollars for a long-term exclusive arrangement) could not be confirmed.
Seems like 500,000 songs or more is the minimum "cost of entry" for the music store business unless you are a boutique store selling exclusive content (i.e., a band selling its own live recordings).
And from the article, some rumors about Microsoft talking to Apple:
One source close to the matter says that Microsoft has made several overtures to Apple to make its store compatible with the industry-leading iPod but has been rebuffed. (Apple declined to comment.)
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