Newest Penny Stock Pick!!

Since the start of the "Digital Revolution" the music
industry has been in decline. Even industry giant EMI has
been taken over by a private equity firm who believe they
can turn it around.

Tomorrow's stock pick is a company whom have found a way to
take advantage of the manic slump in this industry.

Let me explain...

The process of the music industry is split into 4 key roles.

First the "Recorded Music Producer", this is the person who
actually gets in a studio and produces songs with the artist.
They're usually also the firm who found the artist in the
first place.

They'll be paid a one off fee, and most often a percentage
of overall future profits the artist generates.

Secondly the owner of "Publishing Rights"... Anyone can buy
or acquire the rights to an artists song. And this means
every time the song is used in a film, advert, or put on
CD... The owner of these rights is paid a percentage.

(Michael Jackson famously paid $47 million for The Beatles
publishing rights...)

Thirdly there is "Talent Management" this company manage
what the artist actually does... If they go on tour, produce
branded merchandise or CD's, this company will manage it
and take a cut.

Finally there is a relatively new addition to the process,
"Digital Distribution"... These companies liaise with digital
music portals like Itunes, Napster and Music Match.

(For this service they usually take a large cut of online digital sales.)

You can see, the industry is fragmented into a bunch of
different firms whom all take their cut from what an artist
or band produces.

Though it is the addition of "Digital Distribution" that has
recently shaken the industry. US households are now buying
twice as many "digital singles" as real CD singles.

Profits of the big four, including "Sony BMG" and "EMI Music"
are waning... especially since online music portals allow for
the purchase of individual songs at prices of just $0.99 or
lower.

This has surged the industry into a manic depression, and the
uncertainty has lead to low risk music properties (publishing
rights holders, talent management etc...) whom generate
stable ongoing revenue... Being sold for amounts far under
their market value.

A minute ago I told you, tomorrows stock pick have found a
way to take advantage of this slump in the music industry.

You' see, this company... Let's call them "X" own:

X Recorded Music
X Publishing Rights
X Talent Management
X Digital Distribution

In other words they are the first, 100% "vertically integrated"
record label... Which allows them to make money in all
stages of the music production process.

And critically, they are also able to take full advantage of
the "Digital Revolution" because they own the "X Digital
Distribution" firm whom liaise with the likes of itunes and
Napster.

So what does this mean?

It means that when "X" signs a new artist, they can instantly
use that artist to generate profits for all four parts of the
company... Not just one.

And it also means in signing an artist, their risk is reduced
since when they have a winner on their hands... They fully
capitalize and make enough money to carry hundreds of
unsuccessful artists.

And "X" can keep applying this formula to as many artists as
they can physically manage to sign...

Let's say a normal music producer can sign an artist for $2.5
mil... This producer may be able to generate $5 - $10 mil by
producing with the artist and collecting his percentage.

But then once this producer has worked to make the artist a
success other firms step in, and manage the tour or manage
selling the songs online.

However as this firm own all segments of the process they're
able to sign an artist for $2.5 mil and then make many
millions for each subsidiary of the firm.

What's more however, the current slump in the music industry
couldn't have come at a better time.

Hundreds of music properties are now for sale, at prices that
represent a fraction of what they would of been worth a few
years back.

... And because this firm can make as much as four times
more profit out of signing an artist than others can they
are in an excellent position to capitalize on the undervalued
state of the industry.

But everything I've told you is only part of the reason why
I believe this stock will rocket... I'll be sending the "real"
reason tommorrow.