This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

What's That Sound? Probably an Indie Label

Stocks in this article: SNE WMG P

But that inclination of major labels to strike deals with the indies is evidence itself of the shifting landscape. While the old guard still controls the playlist on FM radio, the playing field for new listeners online has been effectively leveled by a proliferation of services and tools easily available to emerging artists.

One of the most important of those has been streaming radio service Pandora (P - Get Report).

A decade ago, Bengloff said, independents faced major obstacles trying to reach fans. Radio's limited airtime was dominated by the big name acts; likewise, retail outlets had limited space and advertising was prohibitively expensive.

"For the most part radio was problematic," Bengloff said. "There were barriers. Retailers, you had to buy your way in for cooperative advertising. So for both promotion and monetization we had those barriers to entry."

Enter Pandora.

"We saw them as a democracy that was going to allow us to have access," Bengloff said. "They treat you more than fairly. They realize that independent music is the lifeblood."

According to a Pandora representative, a full 70% of the company's streaming catalog right now is independent artists. An A2IM report states indies make up 40% of Pandora's streaming.

The success of those efforts has rattled the rusty cages of the broadcast industry, illustrated by a lawsuit file against Pandora by BMI, the subject of a recent analysis by TheStreet's Rocco Pendola. In brief, Pandora is trying to pay the same lower royalties rate that radio broadcasters pay. Performance rights organization BMI, which has a board made up mostly of older print, TV and radio executives and no one from the Internet or streaming media sector, claims that's unfair.

"Gotta love good old boys' clubs," Pendola writes.

ASCAP, the other major performance rights organization, which has actual musicians and composers on its board, is also opposed to Pandora's royalties plan, fearing that its members will be paid even less than they are now.

In both cases, those concerns appear ill-founded. If current trends continue, Pandora and other similar services stand to put considerably more money into both musicians and broadcasters pockets, by offering a much wider selection of music with a greater frequency and with far more precise listener statistics.

According to Bengloff, Pandora has been working closely with independents, putting them at the "front of the line." That cooperation helps swing the musical culture door wide open.

"People want music discoveries," he said. "They want new things."

Independents can provide that experience and, with newfound social media power and statistics provided by places like Pandora, place it more consistently into the context of people's small social circles.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

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