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How the music biz can live forever, get even richer, and be loved

A modest proposal

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Things get complicated. You'll argue that the figure will rise if CD sales fall by significantly more than 20 per cent. But maybe they won't.

Do I hear any objections? I think I do.

HOW DO WE MAKE MONEY? - You have to start thinking really big. Media ownership laws, or regulations about horizontal integration will be vulnerable. The Big Five can each host a decent 24 by 7 radio station. But isn't that giving your back catalog away? It might be, but there's a lot missing from digital downloads. For a start:

- Downloads don't have a cover. 92 per cent of downloaders in a recent poll said they'd buy more CDs. So make the package fun again. Hire some writers. Remember that CDs will be able to play themselves. Or the book will be able to play a soundtrack. You're suddenly in the book soundtrack business! Record companies only think of packaging when Christmas is coming. Start thinking that every day is Christmas - and give people something nice. Music is the soundtrack to human activity from birth to death, so if you can't make money from it, then there shouldn't be a business. As the recording owners, you have to prove that isn't the case.

- Sell Insurance CDs break. Hard disks crash. Phones are stolen. Sell them access to a permanent collection. You're then in the services business. That's where all computer companies want to be. A permanent fixture of everyday life.

- Stopped diversifying yet? Starbucks is a public company. It's also a distribution channel. Buy or strike a deal with them before they realize how much they're really going to be worth. They're still cheap. You might have realized why the phone networks are hanging onto these expensive retail outlets in every town. You'll need some of your own. People object to an EMI store now because they want choice, and an EMI store is a cheesy proposition. That stops being the case the second flat fees are introduced. At that moment you become Tony Benn - a loveable brand, a source and archive of great music. Flat fees and ubiquitous wireless give people unlimited choice - but a good store saves people a lot of tramping around, because we're all lazy, and it lets you add a lot of value once they're indoors.

- Pools are us The LP gave the music business it's golden years. It's true lots of LPs have stinkers. But another way of looking at it is that I've spent $3 instead of $1, and I'm still not that unhappy. iTunes and Napster destroy this model because they let people pick and choose the tunes they like within 15 seconds of hearing them. My sympathies are with you guys, because you're actually right from every point of view I can imagine. The world works on bundles: a newspaper is a bundle of stories; a TV channel is a bundle of programs; a satellite channel is a bundle of TV channels; economically the world only works through bundles. The stuff you don't want pays for the stuff you do. There are sound actuarial reasons for this. It works. And artistically, we wouldn't have had The Beatles or Joy Division without the bundle.

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