With the slowing pace of digital downloading, particularly in the U.S., MIDEM panelists said streaming is where the growth opportunities lie going forward, according to an industry panel that included executives from Spotify U.K. and Oxford, U.K.-based We7.

While the labels and services made it a point of advocating that DSP's should cater to all models - like those who want to own their music via downloads and those who want to listen - one panelist urged that the industry should emphasize the latter, because that's where the main growth opportunities lie.

Beggars Group U.K. director of digital Simon Wheeler said that while a la carte services are not done by any stretch of the imagination compared to U.K. retailing, streaming music will unleash many more creative growth opportunities, a notion echoed by Sony Music Entertainment executive VP of global digital business Michael Paull. "Some users want to own and some want to to listen," Paull said. The industry should cater to both, he added.

But the latter provides more opportunity to reach passive music listeners who don't necessarily want to own their music.

Beyond digital delivery, the panelists said they foresee the music industry moving away from downloads to either the subscription model or ad-supported Web sites. Cell phone handsets, the panel posited, will help build subscription models.

Besides, We7 founder and CEO said ownership is a sham. "I never knew I didn't own my music collection until I looked at the artwork," he said. Then, he realized he owned the plastic CD and paper packaging but not the music, which was licensed.

Beggars Group Wheeler responded that no one will care if they own it when music is stored in lockboxes, or cloud storage, which enables listeners to hear music anyplace, anywhere, anytime on demand. It will allow users to feel like they own it, even if they don't, We7's Purdham said. One of the things that will sustain streaming going forward is the customer-led phenomenon of sharing playlists among friends.

The key to ad-supported services, panelists said, was to convert such users to premium. Meanwhile, other panelists noted that ad-funded DSPs and subscriber-based models each have to come up with their own model, sustainable in their own right.

While the panelists were discussing business models, an audience member who identified himself as simply Paul McGuinness noted that no one on stage was mentioning quality, and he wondered if the industry is comfortable with the notion that the consumer has accepted the low-fi quality of the MP3.

Earlier Nettwerk Music CEO Terry McBride pointed out that the biggest growth segment of the industry is vinyl, much to the delight of indie labels. Of course, he added, don't put a lot of resources behind the format because it mainly serves to create awareness in the indie-sector.

Turning over to digital, he said he noted early on that in the brave new digital world, there would be a lot of digital clutter. Most users, he explained, confronted with the all-you-can-eat model provided by file sharing and other unauthorized musical transactions, would find users downloading everything and using very little. In that kind of environment, users would need, he noted, a digital maid to clean everything up and make it readily accessible. But he also suggested that those who say content is king are wrong, because in the world we live in, context is king. While making money from digital consumption is one goal the industry struggles with, he added that, referring back to context, the industry should also be trying to figure out how to make money from the behavior of music fans.

Finally, he said that the business model must be expanded to accommodate innovation by digital service providers. The industry needs to agree to revenue-sharing models with digital service providers. In the past, labels had been slow to reward innovation by making licensing onerous, if not impossible and he urged the industry to get it right this time.

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