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Apple: Proof iTunes Is Dead

Stocks in this article: AAPL

NEW YORK (TheStreet) -- Over the weekend, I wrote iTunes is dead ...

And now, from Asymco's Horace Dediu, via Philip Elmer-DeWitt at Fortune, we have proof:

While iTunes fades, Apple's (AAPL) App Store surges epically.

And I want to be clear, I wasn't taking a shot at Apple in the above-linked article. Quite the opposite. Their move to play both sides of the fence -- feigning the notion that iTunes Radio could keep downloads alive while jumping into streaming, albeit a bit late -- was nothing more than typical, brilliant Apple. On the B-side, it further highlights the ineptitude of an increasingly irrelevant and physiologically brutalized music industrial complex.

In the Fortune piece, Elmer-DeWitt quotes Dediu, who argues that the way people are spending time has changed. They're allocating their entertainment resources to apps, suggesting that streaming isn't the direct reason why downloads are going the way of the CD.

I disagree.

**UPDATE: As I was publishing this article, Dediu responded to me on Twitter with a clarification:

So, more specifically, Elmer-DeWitt, playing off of Dediu, suggested streaming might not be cannibalizing downloads to the extent many of us believe. Here's the excerpt from his piece:

It's tempting to suggest, Dediu writes in a post called Of bits and big bucks, that music downloads are suffering from the rise of music streaming services such as Pandora (P) and Spotify.
But what's really changed, he (Dediu) believes, is how people are spending their time.

I argue that, thanks in part to Internet radio's unlimited and convenient options, people are listening more.

That's up for debate; however, this is not: Apple has, once again, schooled a pathetic music industry. Thank goodness for the indies, great startups and the great minds who freed themselves from such a toxic structure. Suits become hollow, cigars burn out, but music never dies. 

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

Rocco Pendola is a columnist for TheStreet. 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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