Apple: Digital Vampire?

The Motley Fool
Updated

If you've ever watched the Who in concert, you would know that its legendary guitarist, Pete Townshend, holds nothing back. He held true to form yesterday as the guest speaker at a BBC lecture series in Salford, England, where he let go with both barrels aimed right at Apple's (NAS: AAPL) iTunes.

"Now is there really any good reason why," he asked, "just because iTunes exists ... it can't provide [traditional record company services] to the artists whose work it bleeds like a digital vampire ... for its enormous commission?"

Though he said iTunes is "... a fantastic piece of software, I use it all the time ...," it just doesn't provide the help to artists that the vinyl age record companies did. Other than distribution and payment of royalties, (which it does well) Townshend wished Apple would provide:

  • Editorial guidance for new artists it would discover with the help of a cadre of A&R people

  • Financial support

  • Creative nurturing of those artists

  • A radio-like space on iTunes for artists to present their work to the public

  • Help to artists in copyrighting their material, especially important in an Internet "minefield" which is "... destroying copyright as we know it ..."

  • Marketing support for those artists that iTunes has searched out

Is Apple the only bloodsucker?
If iTunes is indeed bleeding the life out of musical artists, there are plenty of other Vlad the Impalers also doing their part. Google (NAS: GOOG) is readying "Google Music," which may open soon. Google plans on tying that store in with its Google+ so that users of the social media service could make music recommendations to their buddies.

And, of course, there's Amazon (NAS: AMZN) with its music downloading storefront. It made news back in 2007 when it differentiated itself from iTunes by providing music in a pure MP3 file format. That meant no more digital rights management restrictions.

Now you can even get music sent straight to your cell phones from through your wireless carrier. AT&T (NYS: T) has its eMusic Mobile, Verizon (NYS: VZ) provides downloads through its Wireless Media Store, Sprint (NYS: S) has the Sprint Music Store, MetroPCS (NYS: PCS) has its metroSTUDIO, and so on.

What about Steve?
Townshend didn't just talk about iTunes and the music industry. He also expressed strong -- but mixed -- feelings regarding the late Apple CEO and co-founder, Steve Jobs:

"I seem to remember that once in an interview I let my [inner] artist out of the box for a minute too long and he said he wanted to cut Jobs [a part of the reproductive anatomy] off. As I force my inner artist back in the box again, I hear him say that in fact he really likes his iPad and loves to noodle with GarageBand ... He really thinks the late Steve Jobs was one of the coolest guys on the planet ..."

Pete's dilemma
Even though he eventually said "A creative person would prefer their music to be stolen and enjoyed than ignored...," Townshend still has little patience for those who would argue that by illegal downloaders sharing his music it would "... eventually filter down some cash in some form or other to me." He said that he once suggested "... that people who download my music without paying for it may as well come and steal my son's bike while they're at it."

Townshend wasn't suggesting that Apple was stealing from musicians. After all Apple does pay them the royalties they are due -- unlike the music pirates. But one big change he said he wished Apple would incorporate was to stop the practice of requiring artists to go through a third party aggregator, that is, for Apple to pay the artist directly. Why should they have to go through a middle-man?

He could have also put it this way: Don't be deaf, dumb, and blind to the needs of the artists that helped make iTunes what it is today.

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At the time this article was published Fool contributorDan Radovskyowns shares of AT&T. The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Google, Apple, and Amazon.com.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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