Music Industry Gurus' Five Point Plan to Save their Business

"[Music fans] might buy a few tracks from iTunes when they get a new iPod for Christmas, but few go on to become regular paying downloaders," said Tim Walker, managing director of The Leading Question. "The statistics are obviously worrying, but the research does offer clues as to how fans who merely dabble can be encouraged to engage fully with licensed digital music services."

Paul Brindley, Music Ally's managing director, pointed out that the changes they're recommending for the music business are not a matter of degrees, and that this is not the end of the world. "Business models need to change radically if the music business is to stand any chance of halting the current decline in sales. It doesn't have to be all doom and gloom."

Without any further ado, here are five recommendations for the music industry from The Leading Question and Music Ally:

1. Music needs to be bundled with other products and entertainment packages: Value can be created from many other ways than consumers simply buying the occasional download. Music needs to move away from per unit sales and become more of a service than a product. It should be pre-loaded into devices, bundled with mobile tariffs, offered as part of TV/Entertainment/ISP packages.

2. Labels needs to experiment with new release schedules and formats: The old model of single and album releases has run its course. Labels needs to be more innovative if they are not to be freezed out altogether. Look at the likes of Radiohead, Nine Inch Nails and Prince and experiment with new and varied formats, new pricing models and release schedules, digital only releases and promotional partnerships with brands.

3. Free doesn't mean no money: The music industry should not fear free. It needs to embrace it. The culture of the net is free or at least feeling free. But money can still be made from other sources: everything from advertising supported services, to brands paying for an association with the artists to newspapers paying for giveaway CDs.

4. Change the charts: The Charts don’t make much sense anymore. Now that fewer and fewer people are buying music the charts need to reflect the other ways that people are consuming music.

5. Trust the DJ: Online means anyone can access or own John Peel’s entire record collection, but the instant and massive availability of music on demand means you need a trusted guide like John Peel more than ever. The new layers of value will come from the social connections that come about through music as much as from the music itself.