Martin Devon presents some interesting numbers pulled from Billboard.

...the downturn in music sales isn't due to piracy or file sharing. They blame the economy, DVD and video game sales for the drop.

Well, duh. Just look at me. Due to recent events, I will no longer be spending my disposable income on CD's, since it will be dropped into the house (repairs, improvements, etc).

Forrestor also forcasts that by 2005 the download business will finally hit it's stride because of the adoption of new technical standards that will improve the legal burning and transfer of music to playback devices.

Well, I hope so. By 2005, the "digital music revolution" will be in it's sixth year. I've never seen an industry adopt a new business innovation so slowly.

They predict that subscriptions/downloads will account for a full 17% of revenues by 2007.

I would go a little further, I would say that by 2010, over half of the revenues of the music industry will be from some sort of direct-to-customer system. It's all about accessibility and convenience for the consumer.

$2 Billion of music sales won't happen by itself. It will require the record companies (or someone else) to provide customers with new high quality services at reasonable prices.

The "reasonable prices" is the key. If you provide us with a high-quality service and access to tons of material, then continue to gouge us for every last penny, will we really use it?

The Forrester research tells us that the business is out there, but nothing we've seen indicates that the majors have the right mindset to provide the services that music lovers are looking for quite yet.

Unfortunately, I think we're stuck with the current business model for some time yet. It's glaringly obvious by the lawsuits and the kicking and screaming about P2P that the majors aren't ready to change just yet.

This leaves a great opportunity for the record labels of the future to fill this void.

I think we are stuck with the major labels for quite some time yet. Even if every new artist embraced the new internet model, such as Sister Machine Gun's Positron Records, or Chuck D's Slamjamz, that would still leave the majors in control of the back catalogues, as evidenced by the fact that Led Zeppelin can't even regain control of thier own Houses Of The Holy, thirty years later!Eventually, the major labels will figure out how to make money in the P2P environment. It's just a question of how long it will take them and how much they will alienate thier customer base, and even thier source of revenue. Many young artists are disgruntled with the "we sign, we own" mentality of the music business. Will the young artists be the ones to beat the record companies to the punch, offering some sort of service in the vein of Positron or Slamjamz?If the next Eminem or Metallica or Bruce Springstein could forgo the majors for some sort of internet-only distribution such as Positron or Slamjamz it could have a huge impact. If they were able to actually market it sucessfully and distribute on a scale that would be required of a huge hit, they could theoretically take a whole lot of money out of the pockets of the majors. At that point, either the majors would wake up and realign thier business practices or other new, up and coming artists would have a precedent to follow. It would be facinating to watch this happen.