This Day On The Street
Continue to site
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

Startups, Not Apple, Lead Music Industry's Rebirth

NEW YORK ( TheStreet) -- Given the constant sniping over royalties it might not seem like it, but we're in the early stages of the best days the music industry has ever seen. Of course, the music industrial complex doesn't know this. And it suppresses most positive whiffs of change because the notion of the old way of doing things disappearing scares the hell out of its entrenched figures.

The executives who run record labels fear young, bright, thoughtful, well-educated or self-taught tech-minded entrepreneurs. Known entities such as Tim Westergren of Pandora (P - Get Report) to relative unknowns such as Harvard-educated Dan Gurney. I wrote about the company Gurney co-founded, Concert Window, Monday on TheStreet.

As Gurney explains in this excellent blog post, the days of middlemen in the music industry are going away. Fast.

That's exactly what terrifies cigar-smoking label execs. Because it's really an across-the-board phenomenon, sort of like what we witnessed (and are witnessing) as (AMZN) transformed (and continues to transform) the book publishing industry.

The music industrial complex desperately wants Apple (AAPL - Get Report) to save it from itself, however, as I have explained in detail elsewhere, Apple looks out for nobody other than Apple.

Steve Jobs redefined the record album, shifting the business to an a la carte digital download model. Now, with that route dying, Apple hedged its bets by introducing iTunes Radio -- in part, as a promise to keep people buying music via its one-click system. As I discuss in the above-linked articles, if this strategy fails, Apple still wins and the music industrial complex loses. Apple can rest easy on its mobile advertising revenue bump, partially fueled by streaming radio, and the use of iTunes Radio becomes just another feature to sell hardware.

It doesn't take a scientist who takes apart rockets (dissects frogs or runs rats) to figure that much out. It doesn't even require a Harvard grad. However, given the number of blind eyes turned to reality among established music people, I guess these flavors of accomplishment and intellectualness help.

As Gurney does in the aforementioned blog post, I'll take things a step further with this Apple analysis.

Apple rides both sides of the fence -- between downloads and the access model (meaning you don't have to buy music, you can access it for free or for a nominal monthly fee). This company is nimble enough to shift to wherever the consumer market shifts. Plus the revenue it derives from selling music means little, if anything, to it. Again, for Apple it's all about selling hardware.

Apple doesn't care how it delivers content to customers. To reiterate -- it just wants to sell iPhones, iPads and Macs. For as much as Apple disrupts, for all intents and purposes it sits on the sidelines vis-a-vis this unprecedented music revolution.
1 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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 -2.90%
P $9.44 -0.11%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs