The wording of the rights retained seems tightly worded: "artists signed to the e-label will retain copyright and ownership of their master recordings" -- I'm not sure if this means that the artist won't keep the rights to the publishing (ie, the song writing), but as labels frequently don't get publishing rights, I'm assuming this is a "less evil" agreement.
My hunch is that Warner is trying to offer a carrot to the super-stars who recently have been recording songs and selling them directly from their web sites, or doing direct deals with iTunes.
I'm not sure where the "3 songs at a time" concept came from, it seems odd to me.
And my favorite line from the article, is when the Warner CEO says "We like government levies when they benefit us" -- finally, some honesty!
No word on how well musicians will be paid, DRM, or other important issues, but we'll be watching this one...