Related link: http://www.riaa.com/pdf/2001yearendmanufacturersshipmentandvaluereport.pdf

Hilary Rosen, the head of the Recording Industry Association of America (RIAA), received a bachelor’s degree in International Business from George Washington University in 1981. GWU’s International Business department continues to offer a bachelor’s degree by the same name, and requires that first-year students take both “Econ 11 (Microeconomics) and Econ 12 (Macroeconomics), which provide basic economics skills and principles that are critical to later coursework.”

Price elasticity is a basic principle of economics. I first learned about it my high school economics class, and it appears early in introductory economics classes. (It’s chapter 5 out of 40 in my introductory economics textbook from college.) Statements made by the RIAA and Ms. Rosen display a lack of understanding of the concept on her part. (To be fair, this lack of understanding is likely political posturing.)

Price elasticity measures the sensitivity of consumers to changes in prices. Formally, it is defined as the ratio of the percentage change in quantity, divided by the percentage change in price. (Yes, it is a bit weird to divide two percentages, but bear with me.) Price and quantity tend to move in different directions, and it is customary to speak of price elasticity in terms of the absolute value of the ratio.

An item that sees a 20% boost in shipments after a 5% price reduction is said to have an elasticity of 4:

Another product which sees quantity fall by 10% after a price increase of 25% has an elasticity of 0.4:

Goods which have a price elasticity below 1.0 are called inelastic goods, and consumers are price-insensitive. Typical inelastic goods are food (0.4), tobacco (0.45), and gasoline (0.2, short term). When the price of inelastic goods rises, consumers will cut back on the quantity purchased. However, the increased price does not discourage consumption enough to decrease revenue.

Goods with a price elasticity above 1.0 are called elastic goods, and consumers are price-sensitive. When prices rise, consumers cut back. However, the reduction in quantities more than offsets the price increase, so total revenue falls. Examples of elastic goods are restaurant meals (2.3) and electricity (1.3).

(Note: The elasticity numbers for food and electricity are from Economics (10th Edition) by Lipsey, Courant, Purvis, and Steiner, HarperCollins, 1993. Others are cited from a section of a report by the Mackinac Center for Public Policy Research.)

Elasticity is often a reflection of the necessity of an item. Inelastic items usually are basic elements of everyday life. Staple foods usually have very low elasticities because there are few substitutes. (The previously mentioned economics textbook lists the price elasticity of potatoes as 0.3.) Goods with few substitutes also tend to have low elasticities. For example, in the modern American economy, driving is a fact of life, and there is simply no way for most people in this country to avoid buying gasoline. When prices increase, there will be widespread grumbling, but most people will continue to shell out for gas. In contrast, items with high price elasticity items are less essential items or items with a wide range of substitutes, and are frequently considered luxuries.

From a strictly economic perspective, what should we expect to find out about music products? Recorded music is certainly a part of life, but it is only one component of overall spending on entertainment. A wide range of legal substitutes for purchasing new recorded music products exists (listening to the radio and used CD shops are two that come to mind). It is reasonable to expect that the products of RIAA member companies are elastic goods because music is not a basic requirement for life.

What does the data say about the price elasticity of music? Consider the RIAA’s announcement of 2001 shipments. In the announcment, the RIAA notes that total music unit shipments in the United States fell 10%, while total revenue decreased only 4%. This strongly suggests that recorded music products are an elastic good, but some further analysis is necessary to make a definite conclusion.

To dig a bit deeper, I analyzed the RIAA’s market data, in particular, the 2001 year-end statistics. The RIAA gives permission to “cite or copy these statistics … as long as proper attribution is given to the Recording Industry Association of America.” Therefore, I would like to note that all the data on music shipments and market size is taken from the above link, which is data supplied by the RIAA. All following analysis is mine.

First off, unit shipments and revenue were both down. What a focus on total revenue hides is that the per unit revenue rose almost 7%, from $13.27 to $14.19. (In inflation-adjusted 1992 dollars, the price rose a less dramatic 0.8% from $11.42 to $11.60) That puts in familiar economic territory, where a price increase leads to a decline in quantity purchased. I think that even Ms. Rosen would agree with the theory that if the price rises, we should expect quantity to fall. If she could dig out her introductory economics textbook, I am sure she would find that if the price of an elastic good rises, the total revenue falls. (If she still doesn’t believe me, I’ll loan her my textbook, or have her call up airline industry executives or restauranteurs.)

I conducted an analysis of the RIAA’s market data from 1992 through 2001. After adjusting their market figures for inflation using the Consumer Price Index, I found that the industry has experienced an average price elasticity of 6.3 (CDs taken alone have an average price elasticity over the period of 2.8). 2001’s price elasticity was broadly in line with historical norms.

What is the real issue? Perhaps it’s that in 1998, the recording industry was able to eke out both a small inflation-adjusted price increase and an increase in unit shipments, and desperately wants to believe that the return to historic norms was due to illicit file sharing rather than the market returning to historical norms of the past decade.

Economics teaches any would-be monopolist or cartel organizer that it is possible to control price or quantity, but not both. The RIAA’s remarks seem to indicate they feel the right to set prices and simultaneously dictate to consumers how much music is bought. Price or quantity: pick one, and learn the lesson before your customers force you into irrelevance, or worse, remedial economics classes with OPEC oil ministers from the 1970s.

Related link: http://www.uspto.gov/web/offices/com/sol/og/2002/week27/patcomm.htm

I first learned about the now-infamous swing patent (U.S. Patent Number 6,368,227) from NPR’s extremely amusing news quiz, Wait, Wait… Don’t Tell Me!. The swing patent issued on April 9, 2002. The very next week, Wait, Wait had a segment titled “That’s Mine, and I Can Prove It,” where a listener was given three outlandish stories about ownership, and challenged to select the true story.

On April 20, I sent the USPTO a five-page letter about the patent in question citing references which appeared to invalidate the patent. With Google’s help, I found two elementary school handbooks that forbid side-to-side swinging, both of which were published before the patent filing. I would have requested a reexamination, but that privilege is really designed for a commercial entity seeking to invalidate a competitor’s patent, and is priced accordingly (approximately $2,500). I am glad, however, to see that the publicity moved the commissioner to order a reexamination on his own, as published in the Official Gazette notice linked above.

I believe in patents, and I think it’s a great idea that they have such a strong constitutional basis in the U.S. Inventors should be able to protect a unique idea so that they have time to reap the rewards of their efforts, especially when good ideas can be easily copied by a larger competitor. Patents are supposed to protect inventors. I’m much less comfortable with patents being used as a means of attack and a business in and of themselves. The system should protect inventors who are actually inventing, as opposed to inventing on paper. (Think of the difference between a competent network engineer, and a certified “paper tiger.”) If an inventor is building the product or using the process described in the patent, it was clearly worth something to them. If they don’t appear to do anything other than sue people and ask for money, that is much more difficult territory.

Government-sanctioned monopolies are always treacherous territory, and the patent system has a particularly noxious breed of parasite: People who “invent” new technology by studying the state of the art and guessing where it might go, for the purpose of obtaining patents and extorting license fees from productive businesess following along the obvious path of innovation. These patent-system tapeworms file applications for inventions they have no intention of ever putting to use, simply to use the patent document as a method for extorting license fees from others. (Say what you will about Amazon’s “one click” patent, but at they were practicing the patented invention.)

Well, in September of last year, the patent office issued a broad patent, number
6,289,319, for an “[a]utomatic business and financial transaction processing system.” The inventor, Lawrence Lockwood, has enlisted the help of Pangea Intellectual Properties (PanIP) to license the patent. Some news stories state that he licensed his patent to PanIP, while others describe him as a founder of the company.

With the backstory out of the way, I can get to the point of this entry. I ran across a reference to this patent a few days ago when I was reading Bob Lewis’s December 2 InfoWorld column. Lewis says that PanIP “might politely be described as a lawsuit factory.” PanIP’s strategy appears to be to nibble a bevy of small companies to death by suing, and then offering to go away for a license fee. It is not clear whether attacking small business is the end goal, or if it is meant to build licensing momentum before they attack larger e-commerce sites. Many of the companies that have been singled out are small companies that do not have the legal resources to fight a sustained legal battle, and thus have either settled or reverted to less efficient, but non-electronic methods of doing business.

Lockwood has a history of being a paper inventor. He previously sued the SABRE division of American Airlines attempting to extort money for his patents, and had two patents invalidated as a result. According to this
InfoWorld article, during a deposition in that suit, American’s lawyer asked about his employment, and Lockwood responded, “I enforce my patents.”

There’s the reason I don’t like him. He doesn’t act like a man who is an inventor using his patent as a well-deserved shield against competition. He anticipates where the action in a field will be and attempts to obtain a patent, then uses the threat of legal action to extort money from smaller companies that can’t afford to fight him. He probably filed for the patent with the plan of using it to live off licensing revenues. It’s quite possible, dare I say likely, that he would have no idea how to set up a Web site, much less practice electronic commerce. (The PanIP Web site doesn’t let you buy a license to any of the patents they represent, after all.) But somehow, we’re supposed to believe that he deserves money from anybody out there with a transaction-processing Web site. As the first group of defendants said, “You may be next.”

What would happen if you actually had to be using the patented invention (or a derivative thereof) to win an infringement lawsuit?

Related link: http://www.interesting-people.org/archives/interesting-people/200212/msg00061.ht…

Last week, Andy Oram
wrote about a recent INS directive for men from twenty Muslim or Arab countries to report for screening. The
New York Times article he links notes that “all but 20 of the hundreds” of detainees were released. Defining “potential terrorist” as “male of Arab descent or Muslim heritage” is so antithetical to civil liberties that a round-up is unacceptable. Even if we were willing to throw our civil liberties out the window (which, for the record, I am not), mass screening is a costly and ineffective approach.

The official used as the source for the Times story declined to state how many people were processed. Naturally, that made me curious. Although I am not a serious statistician, “all but 20″ has much less relevance without knowing what it is measured in relation to. Did the INS harass thousands of people, most of whom were undoubtedly honest, to find the 20 suspects worthy of further investigation? Probably, given the broad language being used to describe the effort elsewhere. (I first heard about it on KQED’s
California Report on December 18. There was a follow-up story December 23 reporting on related protests.)

While pondering the difficulties in rounding up such a broad group of people, and wondering whether or not they were treated as humanely as the INS insisted, I came across the linked message on the Interesting People mailing list. The author, a computer science professor at UT-Austin, has an incisive analysis of the statistical failures of a broad screening approach, even if supervised by humans. His argument is constructed by analogy to screening for a rare disease in a medical laboratory. No screening process will identify everybody who has the condition, and substantial numbers of unaffected people are misidentified along the way.

Moreover, in many lab settings, you can correctly assume that you have all the samples. In other cases, extremely strong privacy protections can help people feel less wary about the privacy implications of tests. In the case of an INS order to report for a background check, it is safe to assume that people with questionable backgrounds will attempt to avoid reporting, thus skewing the population of those screened far more in favor of the innocent. Such a tilt will tend to make the cost/benefit calculation worse by increasing the costs to innocent people while decreasing the small benefit that results from hysterical mass screening.

The presumpution of innocence has long served as a check on intrusive governments, and it is one of the pillars of our criminal justice system. Demagogues often attempt to weaken it by presenting a false dichotomy between the abstract concept of rights and a tangible feeling of security, often conjuring up criminal demons to frighten us into choosing the latter. Screening programs targeting broadly shared characteristics must be resisted on the grounds that they are antithetical to this country’s founding principles. Furthermore, as a practical matter, they are almost totally ineffective at anything other than wasting money while proving our hypocrisy.

Speaking of hysterical mass screening and wasting money, the TSA apparently has decided to follow the lead of whatever bonehead at the INS ordered the round up. The TSA
is
advising fliers to leave luggage unlocked to make supplmental baggage screening easier. The same mathematical analysis in searching for rare conditions almost certainly applies, given that most airline passengers are not terrorists. I would guess that most checked bags are not selected for a supplemental hand-search, and of those that are, most are not problematic. Meanwhile, there are definite costs associated with leaving checked luggage unlocked, especially at a time of year when people are likely to be transporting valuables. Fortunately, the TSA is looking out for me and is willing to trade the security of my possessions for my safety.

Related link: http://citypages.com/databank/20/979/article7948.asp

I grew up a baseball fan in Chicago, where I was fortunate to learn the game in two stadiums from an older era (the Cubs’ Wrigley Field and the White Sox Comiskey Park). Moving to Minnesota and suffering through the Teflon-coated monstrosity known as the Metrodome was a shock to the system because it was hard to believe that a stadium could be that bad. When you get down to it, the Metrodome is the baseball equivalent of many user interfaces in the technology industry: not just bad, but aggressively bad.

I also was able to witness the building of the new Comiskey Park for the White Sox, which the author refers to as the first effective use of the “modern” algorithm for ballpark construction:

1. State that the present stadium is “inferior” for some
   reason and that “competive pressures” require a new stadium. (Do not provide proof that the stadium is inferior, since it may be easy to rebut. Simply repeat that the stadium is inferior over and over again, until the media stops checking facts due to fatigue. It is, however, acceptable to stop maintaining the stadium so you can claim it is getting “run down.”)
2. Threaten to move the team someplace where the properly appreciative taxpayers will buy you a stadium. (St. Petersburg, Florida, used to have a “state of the art” facility built with no team in mind, simply to attract one to the area. Now that the Tampa/St. Petersburg area has the Tampa Bay Devil Rays, it is sadly no longer possible to use the area as leverage.)
3. If there is still doubt, commission an “independent” report that shows that building the stadium will create incredible economic growth in the area. (Ignore that pesky Mark Rosentraub. More on him later.)
4. If you reach this step and still have not succeeded, wait for the public to forget and try again.

It is particularly amusing, in a sadly ironic sort of way, that we can credit Jerry Reinsdorf, the owner of the White Sox, with a high-profile successful implmentation of the above algorithm. Reinsdorf has been a pioneer in transforming the sport from what I learned into something that looks like a day at the theme park, where fans don’t need to watch the game. It is no wonder the sport is in trouble, given that the core product is no longer the sole attraction at many parks.

One of the few experts who is willing to speak out against public financing of stadiums is Mark Rosentraub, an economist who has studied sports economics extensively and author of Major League Losers: The Real Cost of Sports and Who’s Paying for It. Subsidies are often used “create jobs” at a high cost. In the linked article, Rosentraub notes that the cost to the public treasury of high-tech job creation may be $100,000 per job, but the cost of jobs related to the construction of Jacobs Field in Cleveland was $200,000 per job! Elsewhere, Rosentraub
has said that “[t]he Indiana Pacers have a slightly smaller [economic] effect on Indianapolis than a very large Wal-Mart store.”

The new urban stadiums are better than the “concrete donut” multi-purpose stadiums from the late 1960s and early 1970s, but that isn’t saying a great deal. Many of the new stadiums move fans in lower-priced seats farther from the action. Two observations that particularly struck me were both quoted from the book Field of Schemes. One is that new stadiums can increase attendance temporarily, but that the “new stadium” effect eventually wears off. In the meantime, owners have not learned how to make baseball more attractive to the fans, so they are left with the same quandries they had before multi-bazillion dollar stadiums. (At least they can successfully make taxpayers foot the bill for the stadium.) One long-time fan also contends that seats far away from the field of play fail to entertain children, thus strangling the future of the game. Children who do not learn baseball and cannot appreciate it will not grow up to be the future fan support the sport needs.

In the decade since I left Minnesota, Carl Pohlad has been attempting to blackmail state and local officials into giving him a new stadium. This story, along with many others, say that part of the problem with proposed plans is that Pohlad, a billionaire who, by some accounts, actively supported contracting his team, does not want to contribute anything to the cost of a new stadium. He has very little support among leaders for an expensive stadium because they have correctly assessed the backlash that would result from giving a billionaire a $300M stadium, and they have also concluded that the money could be spend better elsewhere. Now, if only we could get public officials everywhere to follow their lead.

Related link: http://www.cnn.com/2002/US/Midwest/12/17/wrigley.field.ap/

If you’ve ever seen the Cubs on TV, you must have noticed people watching the games from rooftops across the street. It’s one of those traditions that helps to define everybody’s favorite perennial losing team from the North Side, like the way the bleachers sell out, or tossing back opposition home run balls. (As the song A Dying Cubs Fan’s Last Request puts it, “…the last time the Cubs won a National League pennant/Was the year we dropped the bomb on Japan.”) Watching Cubs baseball from nearby apartments is just part of who the Cubs are. In the movie V.I. Warshawsky, the title character, a private detective from Chicago and big Cubs fan, lives in an apartment overlooking Wrigley Field.

Somewhere along the way, though, some enterprising people realized that the rooftops had a good view, and started charging admission. The first time I remember hearing about admission charges was in the 1989 National League Championship Series against the Giants. Wrigley Field was sold out, so it was only natural that access to a nearby rooftop on Waveland (left field) or Sheffield (right field) was worth some money.

Well, apparently, it’s become more routine to charge for letting people hang out on the roof since then, so the Cubs have literally made a federal case out. The team is suing the operators of the rooftop ticket businesses for copyright infringement. The game, you see, is copyrighted, so you are only allowed to watch if you pay for a license. (Who realized that a sports ticket was such a complicated legal agreement?) The Cubs CEO said it was “unfair for the operators to make millions of dollars a year without giving something back to the team.”

His argument only makes sense if there are seats available to see the game inside the stadium. Wrigley Field is a small ballpark, and the Cubs are able to pack loyal fans in. Last season, the average crowd at Wrigley was 89% of capacity, which is fourth in major league baseball behind San Francisco, Boston, and Seattle. (Source:
ESPN) In the National League, attendance figures include only people who show up and walk through the turnstiles, so it’s quite possible that Wrigley is regularly sold out. If there are no tickets for sale, how does it hurt the business?
(Ticket revenue is generally a minor component of overall team revenue, especially in a large TV market like Chicago.)

The lawsuit also seems motivated by a desire to find a legal solution to the “problem” of the quality view the rooftops enjoy. Before Opening Day 2002, the Cubs erected a “security screen” that coincidentally looked like an attempt to block the view from across the street. (See a
photo album here, which includes a view of the
wind screens.) Mark McGuire, a Cubs executive, said that the screen was an essential security measure after September 11, 2001. Tying the view-blocking wind screen to 9/11 is so transparent and tasteless that words fail me.

Baseball is more linked with the past than other professional sports, and depends on its rich tradition to draw in new fans. (I hate
interleague

play, too, but that’s another story entirely.) Before the Cubs do more damage to the foundation of the sport, the management needs to take a step back and study the origin of the term “knothole.” Back in the mythical past inhabited by the baseball legends, it was acceptable for children to watch games through holes in the fence, even though they didn’t purchase a “license” to do so. The Giants’ new baseball stadium even
includes a similar feature designed in from day 1.

If the rooftop fans were not being charged admission, this would be a clear decision in favor of the fans. It is an ambiguous decision with a business involved because the knothole argument doesn’t quite apply, and a number of the rooftop businesses do charge a significant amount of money. Comments made by Cubs management in the case indicate that the problem they have is that other businesses are making money off their product without giving the team a cut. While I appreciate the desire of copyright owners to protect their rights, the entertainment industry has become so aggressive in defending rights that it is hard to be sympathetic when they claim “injury.” It appears that the primary “injury” suffered by the Cubs is that the neighborhood does not want Wrigley Field to be expanded, and the Cubs are not getting their way, so they’re taking it out on the rooftop owners they have tolerated for many years.

What exactly does a baseball team owe the community, and does the community have a right to anything in return?

Related link: http://www.linuxhardware.org/article.pl?sid=02/12/19/145230&mode=thread

Slashdot ran the story of the SCSI-to-IDE converter card. It implements Ultra160 SCSI on one side, and IDE or ATAPI on the other side. I first saw something like this on the Yamaha CRW-F1ZS SCSI CD burner, which comes in the box as an ATAPI drive, but you need to manually attach a SCSI converter. It’s nice to see it as a general product, especially since big IDE drives are so much cheaper than big SCSI drives.

Related link: http://www.blkviper.com/WinXP/supertweaks.htm

A series of tips to make WinXP more efficient, and something to revisit if (”when” is sadly probably more appropriate) I upgrade.

Related link: http://www.nwfusion.com/columnists/2002/1216edit.html?vo

The original reason the
Wi-Fi Alliance formed was to promote interoperability. Back when 2 Mbps DS cards were state-of-the-art, seamless interoperability was not assured. As a result, the industry got together to do interoperability testing and certification, which is the right thing to do with a complex, multi-vendor standard. Buyers generally will hang on to their money until bleeding-edge gear has been proven interoperable and standards-compliant. The Wi-Fi Alliance has done their job well. Interoperability between different 802.11 vendors is never a problem these days, so the certification has faded into the background.

The question Keith Shaw poses is one of user expectations. If companies buy gear with proprietary extensions, users might begin to expect the extension to work everywhere. In an enterprise network, you can mandate that all the APs use the TI chipset with the non-standard 22 Mbps PBCC mode, but there’s no guarantee you’ll get the same performance everywhere. Shaw also wonders what happens if the vendors drift too far from the standards.

Standards drift should not be a problem. The Wi-Fi certification will continue to assure interoperability at the standardized speeds. If you drift too far from the standards, you can’t use the Wi-Fi certification mark. I’m also not too worried by the fact that the high-speed extension might not work everywhere. Even if I can get 22 Mbps to a hot spot AP, does the hot-spot really have that fast a link to the outside world? Probably not, though I’m not the hot spot expert others are. In October, the Wi-Fi alliance unveiled a new
certification mark that specifies interoperability and operational speed. The logo looks the same and is still recognizable, but it clearly indicates that the product has been certified at either 11 Mbps or 54 Mbps, vendor claims to higher speeds notwithstanding.

(A final note: Vendors often try to compete on the basis of proprietary extensions to a standard. Real innovation happens when companies use the standard as a basis for further development within the specified framework. Many imaginative products are standards-based, but have a novel take on how to implement the standard. These products are built by inventors who see the standard as a starting point, not a straitjacket. Incidentally, this is one of the points I really like about Vivato’s switch. They used the standard as the definition of basic communication, and added a whole lot of RF intelligence. The product complies with all the relevant 802.11 standards, but is still radically different from anything else that preceded it.)

“You’ve got circuitry in my rat brains!”

“No, you’ve got rat brains in my circuitry!”

Two great tastes that go great together: rat brains and computer circuitry.

Scientists at SUNY-Brooklyn have wired a computer into a live rat’s brain, allowing the researchers to remotely “steer” the rat, while a researcher at Georgia Tech has grafted rat neurons into a robot, allowing the rat brain remnants to steer the robot.

No word yet on when Comedy Central will televise a Rat-bot versus Robo-rat battle-to-the-death.

versus

Rattus norvegicus seems to have pulled far ahead of us homo sapiens in the race toward intimate mammal-machine symbiosis. We’d better rally, lest we find ourselves ferrying cheese to and fro for our new cybernetically-enhanced rat overlords.

Will our cybernetically-enhanced rat overlords be kindly or draconian?

Related link: http://www.thomsonscenium.com

I read about RCA’s DRS7000N box in a “gifts for geeks” article. The product combines a DVD player with a DVR (digital video recorder, also called a personal video recorder). I pulled down the instruction manual. The DVR looks pretty limited compared to some other products on the market. The only reason I noticed it is that there’s no required subscription to a service run by the manufacturer.

The service is Gemstar’s GUIDE Plus+ service. (See a demo at Gemstar’s interactive program guide (IPG) page.) This is the technology that’s bundled with the ATI Radeon All-in-Wonder cards, too, so you might already have some familiarity with it.

To make a long story short, in other words, unlike competitive DVRs, this one is actually a product. Once you buy it, you own it. It’s not like the long-term rent/lease model used by the competition where you have to have an ongoing subscription that gives them the contractual right to change anything at any time.

Is it a coincidence that RCA, a well-known consumer electronics manufacturer, understands that selling a DVR is a lot like selling a souped-up VCR, but that other companies don’t appear to have tickets on the clue train yet?

Do you own a DVR? If so, which one? If you’re a holdout like me, why?

Tim O’Reilly: Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution

Robert X. Cringely: Curtain Call: Finally, a Business Model for Music in the Internet Age, and Why the Music Industry Probably Won’t Go for It

O’Reilly’s observations, together with Cringely’s suggestions for a scrappy, long-haul new model for musical artists, make me wonder: why aren’t individual bands yet offering subscription services to their entire artistic output?

A yearly subscription might be just $30 and include:

• unlimited access to downloadable back-catalog
• unlimited access to downloadable new releases
• online newsletter
• access to special online events
• priority access to concert tickets
• a once-yearly collectible trinket confirming membership
• automatic annual rebilling until cancelled

After all, fans identify with artists rather than labels or
the nascent aggregation services. Such per-artist subscriptions
would give fans the exact guaranteed-quality music they want,
plus the warm fuzzy feeling that they’re doing the right thing,
and in such a way that less money goes to middlemen.

Possible objections:

• Bands lack the expertise to set up such a system and
  back-end billing. But a service company could easily
  offer a turnkey solution. PayPal offers a
  super-easy system for recurring billing.
• Serving costs would exceed revenues. But a P2P
  distribution scheme could allow the service site
  to merely serve as the fallback source iof rich media
  tracks — with 99% of transfers going direct between fan
  machines
• Some people will just sign up, grab everything, and
  not renew. I’m not sure this is even a bad thing.
  Some of these people would renew each time new material
  becomes available. Tweaking the renewal pricing and
  trickling out new releases year-round could discourage
  such ins-and-outs.

I suppose Prince’s NPG music club was (is?) a little like this.
Kelli Richards points out that David Bowie,
Elton John, and Todd Rundgren
all offer paid fan services of various forms. However, I find that each of these artist websites are crippled by atrocious,
awkward, loud, flash-drenched user interfaces — and so I can’t tell if any of them actually offer the artist’s oeuvre in any
practical form.

(My tip to any acts that want to try a individualized subscription service: drop the garish designs, pop-ups, flash,
tiny type, and sluggish captioning. Just say in big clear letters, “For $X a year you get access to all my music and
additional benefits A, B, C. Click here to sign up. Thanks!”)

Would you subscribe on an annual basis to the output of your favorite musical acts? At what price?