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TheStreet Open House

Starbucks Does More for Music Than Apple Ever Will

NEW YORK ( TheStreet) -- It's the type of data Starbucks (SBUX) and Apple (AAPL) would never divulge, particularly once it starts to make Apple look unquestionably bad, assuming it doesn't already.

Data that sheds light on what a customer does after she downloads one of the free songs Starbucks offers through iTunes. Each week, via its smartphone app and promotional code cards stacked at its registers, Starbucks gives you a free track and/or app download courtesy of Apple.

It's a great idea.

As usual, no matter what happens after the fact, it's a win-win for Starbucks. The freebie provides the company's customers with another feature that makes the Starbucks' user experience one of the best in the business. For Apple, it's just another ingredient in its continued screwing of the music industry.

Apple wants the record labels to believe that its initiatives -- from iTunes Radio to a partnership with Starbucks -- will increase paid downloads. That's a fantasy that, once proven misguided, won't matter much to Apple, but will further decimate a helplessly backward music industrial complex.

After you download your free Kings of Leon or Sheryl Crow single (those were the last two weeks' offerings at least at my Starbucks store and on my app), conventional -- and wishful -- thinking says, if you like the jam, you'll buy the rest of the album, a few more songs or something else by the same or a similar artist. That trajectory might have flown in 2000 or maybe even 2010, but it's set to become artifact if it has not already.

Like physical music sales, downloads are dying. After you get that one free iTunes song, courtesy of Starbucks and Apple, you are, increasingly, accessing, not buying the tastes that initial tease triggered. You'll head to Spotify or Rdio to get exactly what you want or to Pandora (P) to use Kings of Leon, "Temple" (that's their single) or whatever else as a seed to create a personalized radio experience.

That's the future . . . now.

If the music industrial complex ever removes its head from its carcass it will come to realize two crucial points:

  • The Starbucks-to-Apple (or wherever)-to-streaming route is where it's at. So stop being fools and embrace streaming. Let the tech visionaries call the shots . . .
  • Not a company like Apple that has no business being in and has zero interest getting into the music business full force. Apple is not a music company. It's not a software company. It's a hardware company. It might say it's trying to drive downloads -- and, undoubtedly, it is -- but if Apple fails in downloads, Apple still wins, assuming it continues to sell tens of millions of mobile devices annually.

It's really that simple.

So much of what we need to know about the music industry and its fate sits right in front of us. It's obvious to so many, yet the labels -- once again -- refuse to acknowledge the indelible ink on the wall. They're taking on nearly all the risk in a game that ultimately takes no sweat off of Apple's back.

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

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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