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Downloads Die, Apple Lives, Music Industry Suffers

Tickers in this article: AAPL AMZN NFLX P
NEW YORK (TheStreet) -- At Billboard, Glenn Peoples makes a reasonable argument that digital music sales (downloads) are not dying by drawing a worthy distinction between album and individual track sales.

At the outset of his article, Peoples says The data should create the narrative, not the other way around. I argue he's doing exactly what he accuses other journalists of doing, but just to make his favored point. I'm one of the guys who, according to Peoples, misinterpreted what's happening with music consumption. I recently wrote an article citing a Rolling Stone blurb that didn't contain the context Peoples was looking for.

Fair enough. We could argue over what happened in the past and what's happening in the present all day and go absolutely nowhere. That's the unfortunate by-product of a multi-faceted argument dominated by a bunch of people with special interests or an insatiable desire to prove they're right.

Even if digital sales are doing well in the face of streaming's continued growth, the music industry should act like they're not. Haven't label executives and others who make up the music industrial complex studied their own history? Haven't they come to the realization that how things were last week, are today or will be five days from now means very little? It's the long-term that matters. You know, the approach that works so well even if a stubborn core of bitter holdouts refuse to endorse it.

Consider my favorite Jeff Bezos quote that comes after a reporter's question:

Q: Do you have a goal for when you can throttle back on expenses and become profitable?
Our strategy is very, very clear: We're focused on long-term returns for investors. And to throttle back on investment now would be shortsighted. When we have less opportunity, that will probably happen. But as long as we have lots of opportunity, we're going to continue to invest commensurate with that opportunity in a very disciplined and methodical way, but in a long-term context. To do anything else, we believe, is irrational.

That exchange, by the way, took place in freaking 1999. About 427% ago. For the record, AMZN stock is up 427.3% since June 1, 1999 and a whopping 20,061% since going public.

Crappy strategy, I know.

Anyhow, as Bezos indicated more than 14 years ago, the Amazon strategy cannot work nor is it appropriate for every company. It works for Amazon because Bezos isn't fooling himself, his co-workers, his investors or the general public when he speaks of the long-term opportunity Amazon has. Contrast this to Reed Hastings who takes a similar perpetual startup approach at Netflix . Hastings makes a risky, unsubstantiated bet on Netflix's long-term potential; Bezos absolutely does not. I'm comfortable using the last 14 years as evidence to support my contention.

That said, the music industry -- thanks in large part to Internet radio -- has massive long-term growth and diversification prospects. They're real. They're spectacular. And they're on par with Amazon's. So why waste your time clinging to the way things are today?