I know what appears to be the majority here thinks that as little as one payment of $25 is going to result in being able to upgrade AND DOWNLOAD (to local storage) all of their music not purchased from the iTunes store. If so, that is a crazy good deal if anyone has much music- especially older tracks not already at 256K AAC.
BUT, I won't believe the speculation until it is proven. I really think that the media owners would not go for their individual cuts of just $25/yr as justification to go for this. For example, before this, the conversion was 30 cents PER SONG. Now, some here are believing that one could potentially upgrade thousands of songs for as little as $25. That means anyone with more than 84 songs that could be upgraded would find the $25 price to be the better deal. And if you have a lot more than 84 songs to upgrade it would become a bargain.
Thinking about the standard perception of the media owners as "greedy" and how they seem to assume everyone is a pirate until proven innocent, I just don't see this being sold to all 4 of them for their individual cuts of $25/yr. As many have posted, if you do get to download the DRM free replacement tracks permanently, you could just pay the $25 ONCE and largely be set. The incentive to maintain the subscription in year 2 would only persist if you aren't adding new music at 256K AAC (and it mattered to you to get it into that format), which seems less likely now that 256K AAC is the default in iTunes and the iTunes store has the music most easily available at relatively low costs.
What about the music-sharing pirates? If this makes it easy to upgrade tons of old music to 256K AAC, I would guess the new standard for file sharing will be these DRM free files at 256K. So even the crowd that would steal music if it was priced at 1 cent per song will probably be stealing this quality standard going forward. If so, they won't have the need to keep paying the $25/yr to not upgrade pirated 256K AAC songs.
Thus, I fully expect that after the excitement cools down and the realities seep out, we're going to find that the only way to access the 256K AAC masters of matched music not purchased in the iTunes store is via streaming it from an iCloud library. I bet we don't get to permanently download it to our local media libraries, and thus this fuels support for keeping a $25/yr subscription rather than paying $25 ONCE and downloading a bunch of higher quality replacement tracks.
All you have to do is think about the business pieces instead of the "what's the best scenario of me?" dreams. What arrangement is most likely to keep that $25/yr coming in? What arrangement is most likely to motivate all 4 of the "greedy" music companies to play ball? Etc. The answers are not one in which a 20K-song pirate can spend $25 ONCE replace all of his/her old 128K Napster downloads with 256K AAC DRM-Free tracks and thus proving "crime does pay".
I'd love to be proven wrong on this, but even the carefully-chosen wording on the Apple website
http://www.apple.com/icloud/features/ about iTunes Match almost entirely supports a stream-only scenario for non-iTunes-purchased content. The only wording that argues the other side is "for you to listen to anytime, on any device" without an asterisk that says "continuous internet connection required". All the rest of that wording- especially "automatically added to your
iCloud library", which is not your "local" (hard drive) library.
As such, I would bet pretty strongly that it will be "stream only" from iCloud for non-iTunes-purchased media. No internet connection? Either those songs will be unavailable until you can reconnect, or in some protected space on the playback device not transferrable in any permanent way to local storage.