Now Pete's talking about his generation of income

Veteran guitarist gives Apple a lecture about why it shouldn't 'bleed' musicians for profit

Pete Townshend fears innovation will be lost unless digital music providers work like record labels (Getty Images)

With his trademark windmilling strumming arm, penchant for smashing up expensive guitars on stage and pioneering love of rock opera, Pete Townshend has had little regard for the conventions of the music industry during his 50-year career.

Last night the Who veteran broke ranks to take on the business's most powerful player, accusing Apple's iTunes of being a "digital vampire" that is "bleeding" musicians for commission rather than nurturing new talent.

Giving the inaugural BBC 6 Music John Peel Lecture, the guitarist drew parallels between the industry and banks and urged Apple to act more like a traditional publishing and record company in its support of emerging artists. He said: "Now is there really any good reason why, just because iTunes exists in the wild west internet land of Facebook and Twitter, it can't provide some aspect of these services to the artists whose work it bleeds like a digital vampire Northern Rock for its enormous commission?"

The musician urged Apple, whose products he said he admired, to employ 20 talent scouts to spot future stars from the "dying record business". He called for iTunes to provide free computers, music software and training to 500 artists a year and give them bandwidth to showcase their talent. "It will sting, but do it," he told an audience of radio executives in Salford.

Townshend, 66, also called on the company to help artists protect copyright and provide marketing support and assistance in creating physical products. Paying tribute to John Peel, who championed new music until his sudden death in 2004, he said digital music providers could learn from the late DJ's passion for new music.

"That is where we must be going. Musicians need to be heard, to be judged, if possible to be paid, but also allowed to believe they had more than a single chance to get a hit. Software systems that offer this model will survive and prevail – loved and embraced by musicians of every sort – whatever happens financially," he said.

Since launching iTunes in 2001, Apple has become the single biggest player in the global music industry. In the summer it briefly became the world's biggest company, with a market capitalisation of $337bn.

In the UK, physical formats have seen a remorseless decline in sales – with CD sales falling a further 12.4 per cent last year. Meanwhile digital downloads have grown dramatically, now accounting for 98 per cent of the UK singles market. Although there are 70 legal digital music services available in the UK, Apple is estimated to account for 85 per cent of all digital sales. Apple declined to comment on the lecture.

Townshend also admitted having contradictory feelings towards Apple founder Steve Jobs, who died last month. "I seem to remember that once in an interview I let my artist out of the box for a minute too long and he said he wanted to cut Jobs's balls off," he said, before adding: "My inner artist is a bit of an ageing Mod you see. He really thinks the late Steve Jobs was one of the coolest guys on the planet: loved his black outfits, look at my red Vespa ... etc. Irrational."