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The Digital Skeptic: Tommy Boy Has Happy Tune for Music Industry

NEW YORK ( TheStreet) -- Tom Silverman is betting that the music business has finally entered its Spinal Tap phase. That is, it's hit the big bottom.

"I'm a contrarian. Up or down, I am always looking the other way," he told me. "As dark as things look now, I see a doubling of the business in the next decade."

Silverman does not come by his optimism lightly. He was the founder and director of the New Music Seminar, a New York City-based, forward-looking music industry concert and trade group. He also sits on various industry boards, including the Washington, D.C.-based industry royalty engine SoundExchange and the Recording Industry Association of America.

"We have had a bad ride for the last 12 years," he said.

But Silverman's real claim to fame is as one of the founding business minds behind hip-hop music and art. Back in early 1980s, this white kid from White Plains, N.Y., borrowed $5,000 from -- who else -- his parents, to create Tommy Boy Records (now Tommy Boy Entertainment), with the singular goal of promoting then-revolutionary urban acts such as Queen Latifah, Afrika Bambaataa, De La Soul and many others. He set sales records in the process and the label went on to get gobbled up by Warner Bros. Records in 1985.

"Nothing was as mind-blowing as watching the groundswell of rap and graffiti," he said. "All happening within a five-mile radius around the Bronx,"

To be sure, Silverman has had his share of off-the-wall ideas. My favorite is that back in 2002 he invested in something called Kung Faux : TV-length Kung Fu movies re-cut to rap music voiceovers. Think a music industry riff of Abraham Lincoln: Vampire Hunter meets Woody Allen's What's Up, Tiger Lily?

"It was not an out-of-the-park home run, but I am not ashamed of it," he said. "For every hit I have had 10 failures."

The bottom of the music business?
These days, the older and wiser Silverman is seeing a silver lining of sorts emerging in the digital age: That maybe -- just maybe -- the worst is over for the struggling music industry. And that reasonable growth and new revenues are coming.

Silverman is clear that there will be no musical A-Team that parachutes in to restore music sales to days of old. Rather, he sees a mostly globally driven, slower-growing music business that swaps the traditional unit sales model of CDs and downloads with subscription music services such as Spotify, Pandora (P - Get Report), Deezer and others.

"I don't think the record business will be in records. The future is customers paying for access over ownership," he explains.

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