The fact that iTunes is going to be selling
record label songs without copyright protection software is a "psychological positive for
," Jim Cramer said on TheStreet.com TV's Wall St. Confidential
Web video Tuesday.
"It is a generational issue," he told Gregg Greenberg, the host of Wall St. Confidential. "People in their 40s, 50s and 60s, who may be familiar with this music, are not big downloaders, but they are big shareholders and retail investors, so it could propel Apple to $100."
The Beatles stopped writing music a long time ago, and the Rolling Stones stopped innovating a long time ago, but psychologically it's another reason to own Apple, Cramer said.
"Apple is the greatest, other than
, destroyer of traditional intellectual property out there," he said, comparing the record business to the newspaper business.
Google destroyed the newspaper model and Apple and iTunes are destroying the record label model, Cramer said. How Apple destroyed the model has nothing to do with the music itself, but how the music was being sold, he explained.
"It was sold by the album or the CD, and you had a lot of
music you didn't want," Cramer said. "That's not the way the younger people like to buy it."
People have to recognize there are certain traditional business models that have not done well, he said. "
are all failed business models."
Market players want to believe there is still value at these companies, but if they listen to Warner's conference call, they'll realize the entertainment company is "in complete denial," Cramer said.
"That company is totally at the precipice," he said. "You cannot trust them."
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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