Mark Mulligan is VP and research director at Forrester Research, covering consumer media and entertainment, digital music, and other areas at the intersection of content and technology. The following is his latest blog entry, which can be found here. Billboard.biz welcomes guest editorials - please contact jem.aswad@billboard.com.

We have just published our latest report looking at the state of digital music product strategy: " Digital Natives: The Generation That Music Product Strategy Forgot: The Case For a Music Product Strategy Reset."

In 2005, I warned that the fuse had been lit on a demographic time bomb for music product strategy, that young consumers were growing up without any concept of music as a paid-for commodity and were unlikely to ever start paying for it unless the music industry met their needs. Now the effects are keenly felt. Revenues are tumbling, and digital music's growth is stalling, highlighting the diminishing relevance of current music products. Efforts zeroed in on converting thirty-something CD buyers to digital downloads and winning over file-sharing Millennials (16-24 year olds), and with only modest success.

The byproduct of this strategy was to leave the Digital Natives (12 to 15 year olds) un-catered for, so that now a second generation of music fans is following the Millennials out of the music-buying marketplace. So, while the Millennials' demographic time bomb blows up in the record labels' faces, the fuse has just been lit on another. A radical shift in music product strategy is the only feasible defense.

As the canary in the mine for media businesses, the experience of music companies presents lessons for product strategists across all content genres.

The Digital Natives give us a sneak peak at the future. Millennials' behavior though has a finite life span. The activities in which Millennials over-index coalesce around recreating analogue behaviors in a digital context: ripping and burning CDs, even downloading from BitTorrent and iTunes both recreate the analog behavior of getting units of music. This is because they started out in the analog era. They are the transition generation with transitional behaviors.

But Digital Natives don't have that analog era baggage. All they've known is digital. Online video and mobile are their killer apps. These Digital Natives see music as the pervasive soundtrack to their interactive, immersive, social environments. Ownership matters less. Place of origin matters less. Context and experience is everything.

Digital music products, and digital content products more broadly needs to embrace the disruption of Digital Native behavior and:

· Choose your target generation. The one-size-fits-all era has gone for good.

· Put experience first. Focus on compelling user experiences first and business models second.

· Shoulder the product innovation burden. Come to the content rights negotiating table as innovation partners.

· Embrace "watch and share." Bitter as the pill may be to swallow the only way to square the circle of high demand, low willingness to pay, rights owner fees, and elusive mass-market adoption is by making music feel like free.

For more detailed recommendations, analysis and consumer data Forrester clients can read the full report here.

For anyone attending Midem this weekend, I will be presenting some of the findings of this report on Saturday 22nd January. I will post a summary of that speech next week.