Late last week we reported that Yahoo Music was going to shut down its DRM licensing servers and music store on September 30 to become part of RealNetworks’ Rhapsody service. The move should not affect subscribers to its unlimited music service as they will have their accounts converted to Rhapsody, but for those who purchased songs on a track-by-track basis it’s a whole different story.

For them, songs will “generally” continue to play on existing authorized computers but if, for example, they get a new computer or update their operating system then their purchased songs will become unplayable. Such customers were understandably irate. Now, however, Yahoo has announced that it will issue a refund to those users who request them and is supposedly also looking into the idea of an exchange program that would convert purchased music to DRM-free MP3s.

Yahoo is setting an important precedent here for other DRM-ed music stores that have – or could at some point – run into similar problems. It would be nice to see Microsoft follow suit rather than just postpone its DRM server shutdown.