I’ve decided to start a new hedge fund. However, this hedge fund won’t invest in stocks or bonds, or any type of
business. It’s going to be a fund that only places bets. A gambling hedge fund.

It won’t be me figuring out what bets to place, or what games to play. This is a fund.I will find the
best and the brightest, with a confirmable track record and hire them.

It’s an idea whose time has come.

Ihave bet on stocks long and short for about 15 years now. I’ve done very well. There has already been one
hedge fund started based on my trading results. In those 15 years, I have learned that despite all the claims
and books written about efficient markets, the trading of individual stocks are not efficient. There are always
people trading on better or worse information. There are always people trading onemotion rather than logic.
There are always people trading on hopes of the bighit.What Peter Lynch would call the “10 Bagger”. They
were gambling. Nothing more. Nothing less.

It’s not unusual to hear people refer to trading stocks as no different than going to Vegas. They are right.
Gambling isgambling.

The question really is, which gives the opportunity for a better outcome?

If you play the slots in vegas, you can read what the payout ratios are for each casino.97 pct. 98 pct. If
youplay longenough, thecasino will end up with 2 or 3 pct of your money. Unless of course you
go up to the winning side while you play, and quit while your ahead.

The stockmarket equivalent would be to buy an AtThe Money Long Term(LEAP)Put for 2 or 3 pct of
the stock price. The put would protect your downside for several years, and the stock would only have breakeven or
upside potential over that period. It’s a nice thing, except that it’s much, much, much more expensive than 3 pct. As
a point of reference, IBM which is trading at about 94 today, has a price of $5.90 for Jan 2006 95 puts. It’s $7.90
for Jan 2007 puts. Just to protect yourself on the downside for less than 2 months, till the 3rd week of Jan 05, will
cost you $2.40, or about the same percentage as the hold the house puts on you in playing slots in Vegas.

Of course tha’ts for slots. If you play blackjack. The odds are better and every now and then in your favor. If
you play poker, you are playing against the other players, and the house only takes its commission. Just like your
broker takes its commission.

Unlike the stockmarket, you know the rules exactly.You know without question, the house is going to play by
the rules. The gaming commission appears to actually enforce rules of play, unlike the SEC.

And then there are sports bets. Like any other investment or bet, the question always come down to whether there
is good information available, who knows how to use it better, and who is the competition and are they smart or
not.

Honestly, I don’t know if the best and brightest go to Wall Street or Vegas. I don’t know the number of gamblers
via sports books in vegas vs the the number ofgamblers, I mean investors, in the stockmarket.

I do know this. Most casual gamblers,who are the majority of the money spent,go to vegas expecting to
lose money. It’s part of the entertainment experience. People put money in mutual funds and in their brokerage
accounts and pick stocks expecting to make money. They don’t find any value in losing money on a stock, fund or other
traditional investment. That changes the opportunity completely.

How efficient can a market be when the majority of investor expect to lose money? The sportsbooks know this. They
know the difference between smart and stupid money.

They set odds in order to attract as much emotional, stupid money as it possibly can.It also knows that
thisemotional money will skew the odds and bring in the “smart money”. As a result, they have learned to lay
off their investments so that they arejust taking their cut off the dollars invested rather than trying to
outsmart the smart.

To me, this suggests the smart money is better than just good. It’s very good.

Which raises the question of “How did the smart money get smart “, and do they get better returns on their bets
than investors can buying the S&P500? Can it significantly outperform the S&P as this new fund would be
expected to do?

The smart money doesn’t brag about their results, but in the minimal reading and conversations I have had, it’s
the same people coming back over and over again. The smart money people are doing something right on a repetitive
basis.

When you think about betting on sports, there really is far better information about your local sports team than
there is about any local business in your market. The local papers cover the team every day. The localTV
station gives a report about every game. There areradio stations who cover them for hours at a time. That’s far
more information than you get aboutTyco orComputer Associatesor NFI.

In sports, when someone does something wrong, they pretty much tell you the next day or two. Someone suspended
You know it. Someone hurt They report it, and do a better job of policing that than any industry watchgroup.

And stats? my goodness. There is no comparison. You can tape everything and create your own stats, which I’m sure
every “smart money” gambler does. There are public play-by-plays of every game.There are websites that
analyze every which way from sunday every action and inaction of every player in the game.

There also is no such thing as insider information either.Player and team reps can’t talk to
knowngamblers, but do they really need to?

Reporters are there after every practice to interview the players and coaches. They ask the same questions that
every gambler wants to know, if only so they know who to pick for their fantasy teams. They also get to see and
report on who is there and who isn’t and who is limping and who isn’t.

That’s far better than we get from public companies. Not only can they not disclose material information on a
daily basis, theytry their very best to hide their actual performance when they are required to supposedly
disclose all information.

Public companies play so many games with their numbers it’s ridiculous. Should they expense options or not? Per
forma vs GAAP? One time write offs? Buying company after company? Writing down inventories then reselling them?

My favorite is beating the estimates by a penny quarter after quarter. Could you imagine a team that beat its
competition by 1 point every game? Business, like sports, is not that predictable.

That’s not to say that the information is so good that this is a slamdunk investment. Sales don’t get closed,
product cycles get pushed back, drugs don’t work as expected and players drop passes, miss shots and get hurt.

The argument can be made that this is much riskier than a bond, where unless the company goes out of business, you
get paid the interest rate. Pick a strong company or the government and you are relatively safe. All true. That’s why
i love bonds .

You could also make the argument that when you buy a stock, you own part of a company.Legally it’s true. In
practice it’s not.For non-dividend paying companies, you have nothing but a piece of paper. The only hope you
have if that company starts todecline is to findsomeone whowill buy it from you.

A sports or blackjack or poker bet doesn’t have value beyond that game or hand. In that respect it’s just like the
hundreds of millions, if not billions ,of options that are traded, but never converted, on stocks, commodities and
other assets around the world every day.

Just what hedge funds do on a daily basis, and just what I plan on doing.

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Anyone who reads this blog, knows that for the most part I view the media, sports media in particular, as a valuable partner who always takes the path of least resistance when it comes to doing their jobs.

Watching all the coverage of the Piston – Pacer aftermath the media critic in me had two very specific observations:

1. There is no shortage of opinions. Everyone in the media has one.
2. There is a complete shortage of factual information to backup any of the opinion.

Once the media got the transcripts of the suspensions by the league, the transcript of the Detroit authorities and the notice to appeal by the players union reported, has there been a single additional fact uncovered?

In particular the media has speculated about the impact of what happenedto the NBA, our fans, sports in general. No one in the media seems to want to do any investigative reporting to determine if there are any facts that just might prove or disprove the speculation, or maybe even lead to new questions that should be asked.

Instead I get suggestive questions based on connecting dots that are so disparate that its laughable. I have had multiple reporters ask questions starting with…

…… Sprewell’s complaints about feeding his family on the T-Wolves offer to this brawl, I just wanted to ask you how do you believe that teams and the league should move forward? Is there patching up that needs to be done between players and fans? And do you feel that there is a
disconnect between the athletes and the fans?

Spree’s trying to lobby for a raise and Artest going into the stands. Those are related?

Since when are reporters supposed to start with conclusions posed as questions, rather than uncover facts and report on them? Are reporters the “new columnists”?

Or another favorite is, “Since the fans are so close to the action in the NBA, will there be any changes in policy”? Say what ?

Yeah, fans who can afford court side seats have been uniquely identified as a demographic predisposed to violence. There are at least 20 research reports on the subject.

Aren’t reporters supposed to uncover facts and report on them rather than start with a conclusion and find quotes to build a story around it?

It’s valid to question whether there are issues that need to be addressed. It’s valid to ask what has been learned from the events that took place. It isalso valid for the recipients of the questions to expect that the media has done some homework before asking questions.

The questions I mention above came to me TODAY. At this point there are plenty of facts that could have been uncovered by reporters.

There are attendance records, there are drop counts, for all the games played by all 30 teams.
There are local and national tv ratings for all 30 teams.
There are statistically valid surveys that can be done.
It’s possible to go back through the tape of the game and look for incidents or situations that might have occored, on the court and in the stands.
One of the refs during the game was miked by ESPN. Did anyone listen to this tape to see if any new info was picked up by that mike?

How tough would have it been for a single reporter to gather any or all of this and report on it?

I asked all of the above questions, and other than access to the tape,I have gotten answers or taken action on all the above so that I could make informed decisions.

There were other questions I asked and got answered that I can’t list here. I’m sure there were some I missed.

It’s my job to make decisions based on information. I wish it was the job of reporters to report based on more than just the easy and obvious available to them. Then again, I would probaly faint the first time a reporter actually uncovered unique information and asked a question about it.

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Donald, leave it to you to file bankruptcy and rather than apologizing to shareholders that were wiped out, brag about it being a positive step forward for the company. It is what it is, huh Donald?

On TV, viewers do find you entertaining. It’s hard to comprehend of anyone being as self important and delusional about themselves as you are Donald. That can be fun to watch at times. But it does get old. But you already know that from your TV ratings don’t you?

How does it feel to know that in future years when the question is asked, “Which show was the anchor when NBC’s Must See Thursday Night slipped from its perch for the first time in decades”, the answer will be Trump’s show?

Better yet, how does it feel to go from being a self proclaimed ratings machine to having your viewership doubled by the competition, which has more than oncedestroyed you by a cool 15mm or more viewers?

But I digress. Let’s get back to the business of your casinos. Oops, my mistake.I guess that’s not really true. They used to be your casinos, but you made so many poor business decisions, that they are not yours anymore. They belong to the bondholders. You are now a minority shareholder. More importantly, if reports circulating now are true, you no longer control the board. Bondholders got 5 seats, you got to appoint 3, the 9th is a wildcard.

But here comes the fun part. Not only are you out of control, you are now out of excuses. You actually have to make this work.

You have working capital. You have your self proclaimed business ability. You have your name on the buildings. Now let’s see what you can do Donald. Can you actually make this work? Can you compete with the Borgota, which has been kicking ass in Atlantic City?What about the other new casinos that are planned there? Or the already in motion expansions? Will AC grow like Vegas, or will you be forced to bus in the quarter clubs? Can you compete with what is sure to be competition from the state of Illinois with your spot in E Chicago? Can you make a business in French Lick Indiana?

This is going to be far more fun to watch then The Apprentice.

How long do you think your board will give you to make thecasinos work? 1 year? 2 years?

I can’t wait to watch. Since the company will remain public after you come out of Chapter 11, we will be able to keep score every single day.

That’s a tough spot to be in as Chairman and CEO of a company that has your name on the door and your initials as its stock symbol. That’s pressure Donald.

Me, I’m going to have the stock on my short watch. My guess is that once it emerges from Ch11, it will run up on speculation by momentum daytraders. Theywill all pile in the stock on the expectation that you will pump and promote the stock. Which you will. That is exactly what I want.

I will just watch the stock. Read the SEC filings. Read the gaming filings and reports. Make some money off the stock. All the while having fun watching you sweat it out.

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That’s all that can be said about the way Commissioner Stern handled the situation in Detroit. He punished those who crossed the line. More importantly, he sent the message to every player, that if you go into the stands and fight a fan, you will be punished beyond anything that could be expected. For those that think there is a trend in the NBA, or professional sports in general towards fan-player violence, as one idiot in the media suggested to me. You are wrong. You are safer going to a Mavs game than you are shopping in your local grocery store or gas station. There are about 2500 NBA games per year. Over the past 25k or so games, this has happened once. That is not a trend. It won’t happen again. Let’s get on with the season and put this behind us.

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A lot is going to be said and written about what happened in Detroit. People with opinions will share them. There isn’t a single article written that will have an impact. There isn’t a single interview spoken that will have an impact. They will all be forgotten quickly.

What theNBAand the Detroit authoritiesDO will have an impact. I trust both will do their jobs and do them well. Their decisions will also generate tons of opinion that will be quickly forgotten.

While all those who wanted to share their opinions rushed to do so, there was oneaction that occured yesterday that speaks far louder than anything written or spoken. It was so important that pretty much everyone missed it.

There was a Day After referendum held in Indianapolis yesterday.

On the night that the depleted Pacers faced the Orlando Magic the fans of the Pacers and the NBA in Indianapolis had a choice.

They could stay home.

They could go to the game and voice their displeasure with the Pacers and what took place the night before.

They could go to the game and voice their support for the Pacers and the NBA.

In Denver, for our game with the Nuggets, I went to the ESPN SportsZone specifically to watch and see how the fans and customers of the Pacers and NBA would vote. I knew how the players would respond. They would play their hearts out. I wanted to see how the fans would respond.

Everytime the Magic would make a run, you could see the fans start to wonder if this would be where the overmatched Pacers would fall apart. I sat watching , wondering the same thing. For every Magic run. The Pacers answered. With every answer, the fans stepped up their energy.

Pacers fans were on their feet for much of the fourth quarter cheering on their team. They were truly the 6th man on the court, encouraging their team. Infusing a dog tired Pacer team with energy.

When a potentially game tying 3 pointer didn’t go in, they gave their team a “rowdy standing ovation ” as they walked off the court. The Pacers fans voted and the results were loud and clear.

Thank you to all the Pacers fans and the city of Indianapolis.

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Ok newspapers, radio stations and shows, cable networks, any and all entertainment related news shows,
listen up. Im with the PR department of the broadcast network. We all know that the FCC is getting persnickety
(bet you havent used that word in a sentence recently), about nudity and language. Let us first say, we
cant thank them enough.

The environment is perfect for both of us. We want as much media coverage of our programming as we can possibly
get. You need things to cover. So here is the deal. From our end, we are going to create
“Apologevents”.

An Apologevent is where we plan an event that we know we will have to apologize for. The Apologevent will be
designed to entice all the “Im shockedby anything” viewers to call their local stations, their newspapers and
of course Inside Edition, The Insider, etc toremind them of how inappropriate theApologevent was and
howshocked they are.

In exchange for the story we ask that TV outletsstick to the follow guidelines and schedules .

First, you are going to tease the Apologevent in promotions for yourshow. Then you will report thatyou
got calls and emailsabout the Apologevent. Ifyou have extra time to kill, you will have a poll
about the Apologevent on your website and you will report the results. Then you willshow the Apologevent.

Then you will ask some people on camera what they thought of it. Then you will show the Apologevent again. Of
course, we will gladly make the participants available to comment on the Apologevent. Then you will end the coverage
of the Apologevent by saying that our network has officially apologized for the Apologevent. We dont know how it
happened, but we are looking intoit.Then you will add that we are working hard to insure it doesnt
happen again.

Then you will be required to do a followup story the next day. The story behind the Apologevent. We will provide
you with whatever video and access that you need.

Then 5 days later, or the following Monday, whichever comes first, you will do the aftermath story. This one
is completely up to you. If we can help with any of our other celebrities to comment on how it turned out to be no
big deal, we are glad to.

Of course , we promise not to do this too often. Even we at the network cant get away with this more than 1x
a quarter.

My goodness. Canwe (and you “we’s know exactly who we are) get any more hypocritical
?

We create media standards thatprobably 1 pct of the population can actually live up to. I dont know
anyone who has melted or exploded from saying or hearing a curse word. In my group of friends I know fewer who have
never cursed or honestly think they will never curse again. Heck, I mean hell, even curse words from when I was a kid
arent curse words on TV anymore. You can say Hell all you want. When i was a kid, it was H-E-Double Hockey Sticks or
out comes the soap. Damn was very, very naughty and disrespectful. Not any more.

Whats even crazier and more hypocritical is that we can usea derivative of any curse word
and not have a problem at all. Frickin’… Go for it. F’in. No F’in way.. No problem. You are
full of Shinola. Let er rip. FUBAR…Make em figure out what it means. My fave is MOFO…Acronyms are a blast
!

Of course you can also say “He used the F word” or “The S word slipped in an interview”. Its kind of a protected
and accepted abbreviation. No one has to explain what either means to anyone over 10. Its ok to conjure
about 250 ways to make someone think exactly what we want them to think without saying what the FCC and other
watchdogs say we arent allowed to say ! Which leads to the very deep question:

If someone makes you think a curse word in your mind without physically saying a curse word, did
either one of you curse ?

How long will it take for a college to come up with a class about that.

You can also conjure up almost naked images. Show a woman from behind. Her head and a naked back only.Hair
down to cover the suit tied behind her neck. Untie the back so it hangs down. Slide over to give usa glimpse
ofher from the side. You know what happens next? We all will pretend that she is naked.

We know she isnt . Doesnt matter. If you show a woman who is pretend naked at the wrong time on tv, it creates a
firestorm. The media goes nuts. Thanks once again to the FCC. Isnt the FCC wonderful ?Everyone reports that a
network showed a woman pretend naked when we were expecting to see football.We have an Apologevent. Just
what networks love to drive publicity. Its a dream come true.

But what about all the kids that saw the woman pretend naked ? Of course they had no idea that this
was so big a deal until we told them. Which made them all go on the internet and download pictures of the pretend
naked scene.

Not understanding what the big deal was, they realized they have to share all of this with their friends. Kids
love to talk about meaningless things their parents make a big deal over.

The kids have a problem.Their friends will consider them lame if they send pretend naked video., so they
find a real naked image and combine it with the fake naked and now they are cool.

Why do we let the FCC be so hypocritical. Isthere some secret National Association of Broadcasters lobby
asking them to do it because they know the fines they pay or might pay are minisculerelative to the value
of advertising, marketing and promotionthey get from an Apologevent ?

Or is it that we as a nation like to think we are more sophisticated than say the Canadians. In Canada real
naked on TV is ok. In Canada curse words on TV arent so bad. In the US, fake naked is bad, fake
cursewords are ok.

What makesthis funny is that asa country we LOVEthe bizarreness of it all. We listen
toHoward Stern to seejust how he is going to get around all the restrictions on potty, flatulence and
sexual humor. We listen and watch conservative commentators to see just how indignant they are
going to pretend to be about the fake naked and curse words. Whats more fun then to listen to Bill O Reilly or Rush
Limbaugh to hear how many different ways they can restate the unforgiveable cursewords using fake
cursewors.laughing at the fact they are making us think of the curseword in our head.

How excited in anticipation do we get wondering what Jay Leno, David Letterman, Jimmy Kimmel, Conan OBrien, Carson
Daly , The Craig Kilborn Show, Dennis Miller and John McEnroe will do every night to make fun of the fake naked or
cursewords.

We tune into all the Tabloid shows like Inside Edition to crack up over how many times they show the fake naked
and replay thecursewords, with beeps on the audio. We all know that beeped audio is ok because we can
lipread the real curseword easily since we have heard the fake curseword version so many times in other reports.
These shows are the best because they askcelebrities what they think about fake naked and cursewords, and we
get to hear big time celebs use fake cursewords to replace thereal cursewords.

Then we buy Star, People and US Magazines because we know one of them will have uncovered pictures of the fake
naked that proves it was fake, or a picture of them uttering the cursewords, hopefully with a hand gesture to go with
it.If we are really lucky, one of them has found a picture , unearthed by a close friend, of the
first time the person used thecurseword and the friend talking about how they were young , stupid and drunk at
the time.If the magazine really hits the big time and happens to uncover a picture ofwhen they were
first fake naked, or heaven forbid real naked (but with the real parts blurred to make it fake naked) and not
yeta celebrity, then the friend who unearthed the picture will comment about how they were young, stupid, drunk
and also poor at the time.

Isntthis all fun !

Some celebs are really smart. They make themselves available for commentary about the fake naked or
cursewordsand then put out hints that they too might someday do fake naked or real cursewords. This alerts the
media to follow them all the time , just in case they do fake naked or utter real cursewords at a time they can catch
them on video.

This would mean the celeb has created an Apologevent and the whole cycle starts again to play out unless a bigger
celebrity creates an Apologevent and bumps the lesser celeb from the airwaves

How much is an Apologevent of fake naked or cursewords worth ? A whole lot of marketing worth a whole lot of
money

Thanks FCC. You are a wonderful marketing partner

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If Im quick to criticize, its only fair that Im quick to praise.

Thank you David Stern. Thank you Ronnie Nunn. Thank you Stu Jackson. Because of the initiative and action taken by the NBA to call the game by the rules as written, we have the seen the game become much more free flowing, and as a result the scoring is way, way up , reversing a long trend of decline.

I know that Ronnie Nunn and Stu Jackson put in a lot of hours going through tape, coming to the realization, correctly so, that contact on the perimeter slows down play, impacts shooting percentage and gives the defense an advantage that shouldnt be there.

I know there are some playground purists that think the league “should let them play”. Suggesting that if there isnt a turnover or blood caused by contact that its ok. Honestly, there is no commentary in all of NBA punditry that is stupider. The ironic thing is that those same people who call out for “let them play”., are usually the same ones who consider themselves basketball purists.

Well guess what guys. Playing basketball “the right way”, to quote Larry Browns now popular phrase, means a defender should be in a defensive stance, moving his feet, arms extended, keeping his man in front of him. Playing defense the right way is not compensating for lack of defensive desire or skill by bumping , pushing, grabbing and stiff-arming. A defender does these things to compensate for lack of ability to keep up with the offensive player. There isnt a single instance of defensive contact that isnt an effort to impede an offensive player and gain an advantage.

The NBA has instances where defensive contact isallowed. In the post, etc. Now Stu and Ronnie have made it clear that contact outside of those allowed areas will be called as fouls.

This is the point where the pundits say “if you call all the contact on the perimeter, the game will take forever. It was fine like it was”. Again, a stupid comment. Think about the logic behind the comment.

When there is contact initiated by a defender on an offensive player under the current rules, you force the referee to make a snap decision. Did the contact impede the offensive player ? Did it give the defender an edge ? Is it within the guidelines that we have established for defenders? All of this has to happen in a nanosecond. This puts the onus on the official to make a subjective decision and just complicates the job and increases the number of mistakes officials make in a given game.

The alternative that is now being enforced, takes the pressure to judge off of the official and puts it on the player where it should be. Now the defensive player can make a choice.He can play defense “the right way”, without touching the offensive player. If the offensive player beats him, or puts him in a bad position, its the defenders choice whether to touch, knowing it will be a foul, or to let him go, hoping a teammate will help.

The players, for the most part, are smart enough to make the decision. Those who cant, get in to foul trouble quickly, and put their team in the bonus quickly. More importantly,the game is far, far better because the control is completely in the hands of the players.

Better enforcement of the rules is translating into higher scoring games as players are able to move and shoot with more freedom. Defenders who cant move their feet are finding themselves in foul trouble earlier and thats leading to the bonus and more free throws being shot. Together , scoring so far this year is up about 7 points per game vs scoring through November of last year.

Here is some more evidence of how the game has improved compared to only last year.

Through November of 2003, there were 7 teams averaging 95 pointsor better. This year there are 19. Last year there were 10 teams scoring under 90 points. This year there are 4. Last year there was 1team with an adjusted field goal percentage of 50 pct or better. This year there are 7.

The examples go on and on.

The best news is that defense is usually better than offense early in the season, so shooting gets better as the season goes on.

Right now we are getting the best of both worlds. Teams that can play offense and defense “the right way”, with the game being decided by the players, and not by the officials.

Commissioner Stern says to expect this to continue the entire season, which is a beautiful thing.

Thank you Commish, Ronnie Nunn and Stu Jackson

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Can the music industry cry wolf any longer?

This is the only industry in the world that can see thousands of its retailers close, reduce the number of products it sells via cutbacks in artist rosters and albums released, cut back marketing and promotional dollars and then blame a reduction in sales on someone or something other than themselves.

That big bad boogieman of piracy is blowing down everyone’s house. The poor music industry. Except of course that there is nothing more than anecdotal proof that Peer to Peer networks hurt music sales, and to counter those, there are studies and anecdotal evidence that the sampling opportunity that P2P networks create actually help sales.

Of course, the other digital entertainment mediums have seen booming sales over the same period. Games. DVDs. VHS. Even books on tape have grown. I’m not saying anything new here, nor I am saying anything I haven’t said before. Which leads to my points:

1. The amount of money the RIAA is spending, along with other lobbying efforts in the industry, could go to artists, and probably be better spent on marketing the industry and getting consumers excited, rather building a wall around your industry that only slows it down.

2. It’s a crime that our politicians have fallen prey to your “please protect us please.” Our country is in enough debt. We don’t need to spend more to put legal walls around your industry. How long before we have tort reform for the music industry?

3. There are solutions that are simple. Learn a lesson from the cable and phone industry. Go to where people already are paying for digital access to your product, and for a little bit more money, give them a more product, legally and easily.

Why in the world haven’t you gone to AOL, Cable and DSL providers and offered your catalogs by genre for 10 or 20c per month, per subscriber? Universal, take a lesson from your NBC/Universal pals. Create a rock channel, an 80s rock channel, a hip hop channel, an oldies channel, etc, etc. Put your catalogs for each genre channel on a server that you control. Go to AOL, et al. Offer their users access to DRM protected music that gives them the same rights as ITunes or the MSN store or whatever makes you feel good at night rights. Price each channel cheap enough that all the broadband or dialup ISPs can package them in marketable solutions with the other labels. Its a no brainer sale. AOL et al, send out emailers and promotions.. “Want the latest rock hits from artists like xxxxxx ? AOL brings you legal peer to peer. Download all you want, check us every day because we add more music every day.

It’s the Rock Download Channel from AOL and its only 1 buck per month on your AOL bill. Click here, and you can start now… (billing is for a minimum of 12 months) Of course there is also the oldies channel, the hip hop channel. The old school hip hop channel, the R&B channel. However many ways you can dice and slice your music, thats a buck a month. Per channel. Per Sub.

Consumers will do it because its easy, safe and cheap. We are used to being sold “1 more channel,” or “1 more tier” or “call waiting for an extra 99 cents per month.” We will commit to five channels per month at a buck each for a year before we would ever commit to spending $60 on CDs at a sitting.

We like to buy things a dollar at a time. If you wanted to be greedy. You could even offer a $99 dollar setup charge that allows the users to dump the complete channel on their music device or hard drive right when they sign up. ISPs, AOL, Cable companies and Telcos will jump up and down to sell these value ads. They will advertise them. They market them. They will probably offer you lots of money to do exclusives with them. They all need and want new digital services to drive their digital tiers and Hi Speed Data.

Comcast is making a huge bet on Subscription Video on Demand. Why would they be any less excited about Subscription Music on Demand? Universities could get a discounted version that they offer at cost. $50 bucks per head, per semester and you are a legit downloader. It’s included in your options at the beginning of the semester. Then of course the kids are going to want it when they get home.

I’m sure this isnt a new idea. I know its been talked about, because I have brought it up in meetings again and again. So the question is, why hasnt it been done? It’s so much more profitable than anything that could ever happen with per song downloads. 200mm singles sold gets you 200mm in gross revenue. One song at a time. 5mm people buying five channels at five bucks per month gets you 300mm dollars in predictable annual gross revenues.

But that’s far from what the market will be. I’m guessing, but it could easily be 40 million people averaging five dollars per month. Thats real money. In an industry that sells 800mm or so albums in a year and makes what, 1 to 3 bucks net, per CD, that’s nothing to sneeze at.

I know, you are afraid it will cut into your CD sales. It won’t cut into your CD sales, or should I say, it won’t help your CD sales any more or less than existing peer to peer networks. This is a great time for the labels to decide to make some money. Consumers want a cost effective, easy to use way to buy music. Broadband and dialup providers want new revenue options and to stop dealing with subpoenas from the RIAA.

The only ones against the move? Probably the RIAA and our politcians. The RIAA would have nothing to do but give out gold and platinum records and the politicians would lose a gravy train of money.

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It was probably but just a matter of time ’till it happened, but I didn’t want it to go unnoticed. I got fined for my comments in a previous blog entry regarding opening night in the NBA.

I’m sure thisfine for a blog entryis a first in professional sports, and in a lot of respects it’s amusing and will be fun for others to write and talk about, but it raises a bigger question.

Do the customers and fans of the NBA or other leagues, feel it makes theleague appear stronger, weaker or unaffected when a player, owner, coach,GM, or executive publicly criticizes the league?

Are you as a consumer more likely to purchase, watch, recommend our products, or are you more likely to reduce your attachment and purchase of our products? How does it affect how you interact with us?

I’m curious about what the blogosphere thinks about the topic.

thanks

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