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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

iTunes Is Dead: The Record Industry's Next Steps

NEW YORK (TheStreet) -- Two big announcements hit Friday that ultimately highlight the decrepit state of the music industrial complex:

  • Digital downloads are dead. As reported by Billboard, digital music sales decreased -- for the first time ever -- by 5.7% in 2013.
  • Gracenote launched an API that allows brands to create their own streaming music services (i.e., Pandora (P) knockoffs).

Before we dig into the aforementioned decrepitness, a few random, but related clarifications and housekeeping notes:

  • Despite the overall drop in digital sales, Apple's (AAPL) iTunes Store market share increased to 40.6% of domestic album sales in 2013. That said, this article's headline stands because, make no mistake, as I observed throughout 2013 (see, e.g., this article from August), Apple wins no matter what happens. The record industry cannot hang its hat on the still-breathing iTunes Store. That's a ticket to certain death. Put another way, iTunes will not be the sole long-term survivor, as digital sales go the way of the compact disc. That's why Timothy D. Cook hedged his bets with streaming service iTunes Radio.
  • Bold type here: Thank goodness for the creative souls who still exist within or in association with the lame factions of the music industrial complex. From megastars such as Beyonce and Taylor Swift to hard-working indies (wait!, Taylor Swift is indie!) to the great minds who work at the labels and fight against visionless pencil pushers, legal departments and high-level, cigar-smoking industry executives. These people, along with tech- and data-driven music startups and Internet radio pioneers help keep hope alive.
  • The Gracenote move is more of a salvo towards the folks who do excellent work at The Echo Nest than it is Pandora or Spotify. I'm getting to know The Echo Nest folks and early indications tell me they'll be just fine.

With that out of the way, on to the pathetic state of the music industry holdouts, who, sadly, hinder progress the above-mentioned "creative souls" make. This dynamic leads to inspiring stories of individual success (that others can work to replicate), but not the type of widespread organizational acceptance of a new paradigm for making and marketing music.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,122.01 +15.31 0.09%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.6210 -1.0160 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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