Panelists at the Media & Money conference agreed the music industry is on its way to new business models—but they had different opinions about what happens to the old model.

There is optimism in the music industry because it used to be dependent on one packaged good, the CD, and which is now being replaced with five or six income streams including song and video streaming, said Fred Davis, a partner in the firm of Davis, Shapiro, Lewit & Hayes. Davis made his comments during the "Moving Music in the iTunes Age" panel at New York's Marriott Marquis.

Andrew Lipsher, a partner in the venture capital firm Greycroft, said that while formats like song and video streaming existed before, respectively, in radio and MTV, "the way we consume them has changed."

Now, you can build a business out of discovering music, said Davis, citing sites like Imeem, and MySpace. But "it's wildly complicated" to get new-model music businesses off the ground nowadays as compared to the old days, when you just opened a record store, Davis said.

Lionsgate Music president Jay Faires pointed out that for bands like Radiohead, only 7% of their revenue comes from album sales, while publishing, touring and merchandising are all healthy revenue sources for bands.

One of the things that will foster new business models is the Oct. 2 setting of digital royalty rates by the U.S. Copyright Board. The setting of those rates gives "definition to the market," according to Primary Wave Music chairman Lawrence Mestel. At the very least, the CRB rates have "taken an argument against investing in [new digital music models] off the table," added Lipsher. Previously, uncertainty over the unset royalty rates had stymied investment somewhat.

Mestel predicted that the CD will be a vanity purchase down the line, after Lipsher said the CD is misperceived by the market and lauded it as an excellent digital container that can be ripped into multiple formats. The Orchard president and CEO Greg Scholl predicted that whatever happens to the CD, physical retail will never go away. He said people are social creatures who like to leave their homes and go shopping, and he predicted that they will exchange money for goods that contain music in one form or another.