I was pleased to see that my note provoked so much interest, as well _as some well thought-out counter arguments. Taking a few of these comments, I have the following words in response:

First, however, I want to make sure we are talking about the same thing. A subscription service works as follows: a user signs on for a period of time, like a cellular contract. The monthly fee is $5 to $10. You then have the right to download a limitless number of songs, which you can sort into playlists, etc. At this point, the service is just like iTunes.

Each month, you connect back up to the server, which automatically tracks/notes what songs each user listened to that prior month. The revenue from that user is then distributed to the owners of the recordings based on the number of times each song was listened to. Every month, the money from each user is divided up amongst the owners of each recording, to be shared with the artists and publishers.

If you end your subscription, the songs you downloaded to your hard drive disappear, after a notice and warning period. These downloads are called "tethered" because the owner can yank them back if the condition of payment isn’t being met. The desire to continue to use the service becomes increasingly sticky as the database of the user’s songs increases over time. No one wants to lose their collection.

The essence of the subscription model is a radically reduced price to the consumer, tied to a premise that so long as you pay the modest monthly sum you can enjoy all the benefits of ownership.

Of course, for an incremental fee, you can permanently own any songs you wish, and the tether will be removed.
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To Jim Griffin:

I am not sure what program you are promoting. It seems you like the idea of an involuntary fee at the ISP level. While this is a lovely notion, it is unfortunately not going to happen. It’s tantamount to having the government impose a new "music" tax.

This involuntary system isn’t what Bob was promoting in his email. He likes the idea of a nominal, flat monthly, voluntary fee to allow limitless, permanent downloads via the P2P services. To quote Bob’s Blog on this subject:

"This system (to charge lots of people for the right to secure ownership) already exists. All that lacks is the monetization. This is the P2P world. Instead of suing customers, the RIAA should be licensing them. An insurance policy AGAINST being sued. Sure, not everybody would pay, but many would. Revenue would be coming in instead of going out. It wouldn’t be much per customer, but it would be a lot in the AGGREGATE! There’s your album model… Instead of getting one person to buy many albums at ten bucks a throw, get the people who AREN’T buying music to pay ten bucks a month. And add it all up at the end of the day and you’ve got a huge pile."

Responding to Bob’s proposal, unfortunately, if the downloads are permanent, there is no way to avoid the inequity of unconditional ownership being granted for fractional pennies. All Big Champagne can do is tell us what songs are being downloaded. Merely tracking the songs that are downloaded doesn’t address the money issue for the labels, artists and publishers.

_Jim addresses this inequity by stating that payment is involuntary. While I would love this to be imposed, it will never happen in the practical world.
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By the way, Jim, your ASCAP analogy is false because with ASCAP there is no PURCHASE, merely the rental for a term of contract of the right to perform the music in the venue, which is a transient usage. The analogy would apply if someone could join ASCAP for a month and then quit, with ongoing _rights to play every song forever with no more fees.

_The challenge between Bob’s desire to make music, essentially, free, and Jim’s desire to make payment mandatory, is a voluntary subscription model that is so attractive that it transforms how people consume music.

_Finally, my objection to licensing p2p is not based on a belief that i t_somehow keeps the illegal exchange of music under control. Illegal _music will always be a problem. When I first installed cable, the installer offered to give me free movies if I tipped him $50. Everyone had the same experience. But this is no longer the case. A combination of a better pricing model AND a better technological approach transformed the cable marketplace. I believe the same can work with music.

To Dave Lang:

Simple economics show that the incremental value to the user of a few new songs is insufficient to prevent wholesale drop-outs when the nominal cost per song become undesirable. The user will terminate the subscription and steal or borrow those additional songs.

To John Brodey:

I wish the sole problem was the quality of today’s music and that people would pay if the music were superior. That is disproven by the number of Beatles songs that have been illegally downloaded. We need to change people’s thinking about music, and a huge part of that is recognizing that to the modern consumer, music has become a commodity. It must be sold accordingly.

To David Reilly:

You are arguing that the model will never change. I disagree. Moreover, the current model is failing both the labels and the artists. No one who knows me can doubt that I am a fierce artist’s advocate, but the last thing I want to see is the labels go down in flames because the labels are still the only companies willing to spend money so that you can discover new artists and music.

To Charles Crossley, Jr.:

"Giving the consumers what they want" isn’t the issue. What they want is free, unlimited music. I’d love someone to give me a free phone and car, but eventually there won’t be any car or phone companies. The cost of making albums and promoting artists isn’t going to disappear. The dream of the internet as the perfect tool to connect artists with their fans was disproved when not a single MP3.com artist became a star.

What is needed is a radical new way of thinking about how music can be sold and consumed. Subscriptions may not be perfect, and it may take a generation to change how we think about consuming music, but the other models all fail because they do not generate enough long term revenue to support the system.

To Dwayne Keir:

It is unrealistic to assume that without an organized industry, significant numbers of new music artists will be able to earn a living. No one pays enough money to see an unknown band for the band to survive. That’s why record labels are often required to subsidize tours of their new acts. The "connection" comes from repeated, costly exposure, that someone has to pay to create and nurture.

To Bob Klanac:

As I have said, the subscription model will require radical consumer rethinking before it is fully embraced. Indeed, the technology that will allow full portability, including all the unfettered benefits of ownership, hasn’t been perfected yet.

Once the benefits of enjoying a subscription are equal to the benefits of unlimited ownership, the conversion can commence – but I suspect that Bob Klanac wont be an early adopter.

To Sean Burak:

Your approach is intriguing but it seems like a tortured way to avoid a very simple subscription model. Like Jim Griffin’s approach, it requires a mandatory payment model, that is as off-putting to the consumer as the rental model inherent in a subscription. More critically, it still fails to accord enough money to the owners, artists and publishers to support an ongoing industry. The issue isn’t tracking so the money can be divvyed up, it’s the actual dollars it can generate for the access it allows.

If a user downloads even 1,000 songs in a month, even at your high of $50 per month, the incremental payment for unconditional ownership drops to FIVE CENT per song. At such a rate, the financial model completely collapses. A million selling album would generate a total gross of $600,000, barely enough to pay the costs of recording, little yet any promotional or marketing costs.

In summary, while the arguments are well-meaning, I am dissuaded that there is any inherent flaw in the subscription model other than the difficulty of adoption, which I have already noted.

I am not suggesting the the subscription model is the ONLY solution, but in my thinking, supported by almost 30 years of experience int his business, it is a model that requires serious exploration and dialog because what we have today clearly isnt working.

Note from Bob: I was advocating LICENSING! Whether it be voluntary OR at the ISP level. Better to accumulate SOME revenue rather than none!