A piece in yesterday's New York Post frames the current state of the music business in a useful way: John Mainelli's article paints a picture of a marketplace that is not, as is often said, a battle between new (digital) and entrenched (recorded) media interests but rather between portable digital and entrenched radio interests. This hasn't been the media's main music tune of the last few years, but it's an important one nonetheless.
Though there isn't a ton of meat in the article, it raises an interesting point: Mainelli ties the proliferation of portable hard-drive DJ machines such as Apple's
Whatever mobile digital music's actual numerical impact, it's not hard to see there's something to this theory. Radio -- in recent decades, anyway -- has been an easy way for listeners to take their personal musical tastes with them wherever they go. The iPod and other machines, however -- with their massive hard drives and song libraries in the thousands -- are now increasingly moving in on that turf. They've eliminated commercials. And they're cutting into DJ airtime, which depending on your opinion of DJs is either a very good or a very bad thing. (Well, it can't be good for the DJs.)
And falling somewhere in the middle of all this is the satellite radio provided by XM
It wasn't too many years ago that the Web seemed to hold substantial promise as a distribution medium for traditional broadcasters. And I'm a fan of several online radio stations, so I'm certain there's value there. But I'm even more certain that even as the "new" music business shows signs of stabilization -- the peace accords the record labels have struck with the digital distributors come to mind -- we've yet to see things truly shake out, leaving investors to ponder a continually uncertain future.
In the end, it seems unlikely that any service that can't or won't serve customers on customer terms has a limited long-term future. The onus is currently on radio broadcasters to get creative.
David Gardner recommended Dell Computer for Motley Fool Stock Advisor subscribers in the February 2004 issue. To learn which other stocks have caught David's and his brother Tom's eye, subscribe today and receive a six-month money-back guarantee.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.
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