Analyst firm Parks Associates: "Music industry stuck in the past"

In its report, 'Thinking outside the disc', Dallas-based
analyst firm Parks Associates suggests the music industry has "so far
failed to adapt" to the digital age. The analysts argue that the
businesses fight digital piracy by creating a free music-on-demand service
that relies on advertising for its income stream.

Changing Marketplace

Research analyst John Barrett said: "Digital music has
changed the market, and business models need to change too or the industry
will suffer the consequences.

"Even if file-swapping networks were to magically
disappear, the traditional revenue models would still be under strain,"he
warns.

Barrett argues that the recording industry has always
been able to sell the same musical works multiple times to the same
consumer simply by repackaging it."Digital music allows consumers to
repackage music themselves,"he warns.

The music business is unlikely to adopt such a
business model, however, as industries reliant on advertising have been
hard hit by an advertising slump in recent years.

Sticking With Vinyl?

Industry insiders also point out that conventional
audio CDs have only finite shelf-lives, and that digital music collections
can themselves be lost, through computer error or theft. "If consumers
want to keep music, they should buy vinyl--it lasts for years," a music
executive told Macworld.