1 in 50 artists a label supports becomes meaningfully successful.1 in 50 of those manages to successfully cross over to other media.1 in 50 of those leverages those cross media deals into non-media brand deals.50 X 50 X 50 = 125,000Even if I am off by an order of magnitude, it’s still a crappy business.

I am dubious that iTunes music business is cash flow positive. If it is, it is very thin margin, and I suspect that those thin margins are not negative margins because the marketing budget is co-oped with the iOS marketing budget.

The key point here is “stand alone.” Perhaps it’s not enough to build and operate on a mainly a single product/service. Spotify and Pandora have both been around for awhile, they have revenue growth but profits lag or at best are comparatively meaningless.Apple iTunes is a multi-billion dollar super profitable business but it’s reach today is now much more than simply music, it’s the glue that exponentially keeps the ecosystem locked in. Google + Apple, they really are an exhibition on platform leverage.My observation and lesson learned, partnerships are essential for mono-product businesses, at least for now…

Erik, i’ll give you a specific example I heard last year from the guy running of the three largest labels.Justin Timberlake was created by N’Sync, his fame is not his alone from talent, and his future movie earnings – the label helped do that. Also any ads he is in, any clothing lines – true 360 deals.It actually reminds me a lot of the music biz in China.

#Trending

That was a serviced I loved, but I had no idea how they would monetize