This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Is Apple Screwing the Music Industry?

That's 10% of iRadio revenue only, not total iAd dollars. That's not much money at all.

For example, Pandora will generate $372 million in mobile ad revenue in 2013, according to eMarketer. Let's say that's what iRadio produces in its first year. Heck. Let's just say it generates $500 million. That means Apple pays Warner's publishing arm $50 million? $50 million to split up between everybody entitled to a cut equals next to nothing.

That's awful, yet Apple (and Google) can use that valuable music listening data in association with other parts of its business. It will undoubtedly help these companies do a better job targeting ads across their ad networks, not just on the radio product. They can combine this data with other consumption patterns, Maps data and, in Google's case, search data, to create a treasure trove that actually matters within the context of their primary businesses.

Yet, the music industry, directly responsible for this music data -- which, make no mistake, is vitally important -- only gets a sliver of that revenue. The sales attached directly to the radio product. It's perfectly logical to argue that they deserve more because they are absolutely responsible for the revenue their data help produce outside of radio, but within the larger ad networks.

Did any music industry executives bring this up during negotiations with Google and Apple? Will the companies still left to do deals bring it up? Or, maybe it has been addressed and is already part of the deal. Somehow, I doubt that.

The music industrial complex banks on increased digital music sales in the iTunes store (hardly a guarantee). And it -- again -- secures pocket change for publishers. Yet the labels rake in a sweet 16 cents per stream from Apple; more than Pandora pays under the compulsory licensing scheme.

Increased music sales mean nothing to Apple and Google. Tim Cook and Larry Page piss that type of money away on a Saturday night. It pays for the company Christmas party. It's all in the data . . . crucial data gleaned from a loss leader that fuels Apple and Google's empires while providing scraps to songwriters and such.

And the music industrial complex has a problem with Pandora? Remember, Pandora has loads of data and it's more than willing to share.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $129.36 0.00%
GOOG $573.64 0.00%
P $15.43 0.00%
FB $79.60 0.00%
TSLA $199.56 0.00%


DOW 18,203.37 -85.26 -0.47%
S&P 500 2,107.78 -9.61 -0.45%
NASDAQ 4,979.9010 -28.1950 -0.56%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs