Of the causes of decline, creative bankruptcy is the most difficult to evaluate and the idea that divides the industry the most. "That's one of the most ridiculous explanations I've ever heard," says Jay Berman, chairman and CEO of IFPI, the industry body. "If the music is lousy, why are so many people downloading music from the internet and burning CDs and buying pirated copies?"

Glance through the release schedule for the final quarter of this year, however, and the idea that the industry is struggling to inspire its customers becomes harder to dismiss. The Christmas album charts are likely to be dominated by greatest hits packages from old stalwarts such as Elvis Presley, the Rolling Stones, U2, David Bowie and Elton John, plus a range of pop acts discovered through reality TV shows such as American Idol.

Simon Wright, chief executive of Virgin Entertainment Group, which incorporates Virgin's music retail business, is among those prepared to acknow-ledge that the record industry may, in part, be the author of its own misfortunes. "The industry is making piracy the excuse for falling sales when, in fact, one of the big reasons is that there's less diverse artists out there," he says. "There's no oomph in the music industry at the moment - and there's no movement like punk or grunge or Britpop to excite people." Ah yes, the crappy music argument.

Alain Levy, head of recorded music at EMI, the world's third largest record company, concurs. "The industry is not good at creating stars who last for a long time [any more]," he says. "Over the last three years I have noticed that the second albums from new artists generally don't sell as much as the first.

"This is a problem because over time the industry is not going to create catalogues. Coldplay, one of our bands, are an exception - the second album looks like it will sell more than the first and that's exactly what you want because you are developing the artist as a long-term prospect. But as an industry we have become too short-term and too marketing-oriented - we spend more time thinking about the timing and packaging of a release rather than making sure we have the right album. We need to change the way we approach music." Five years ago, before free peer-to-peer file transfer services such as Napster had become popular, trade associations including the Recording Industry Association of America and the National Association of Recording Merchandisers were so concerned about stagnating growth that they commissioned research to examine what the industry could do to return to the heady growth of the 1980s and 1990s. Among the findings was an allegation that record companies were spending millions of dollars promoting music that was uninspiring and sounded too much like everything else available.