We are living through extraordinary times for the music business. One of the great success stories of the 20th century is turning unpleasantly sour in the 21st. In the hundred years or so since Nipper first listened to His Master's Voice, things have arguably never looked as bleak as they are now for what we used to call the major labels - an obsolete term in the era of silver discs, but one that still sticks to such business giants as EMI, Columbia and RCA.
What has happened to these musical monoliths? Obese with their own success, the major companies now seem slow and enfeebled, unable to come to terms with an era when piracy, downloading and supremely fickle audiences threaten their very existence. The stock value of EMI, once the grande marque among all the logos, has plummeted to an all-time low in recent weeks. Last month, the mighty Sony Music, which ate up Columbia in 1988, laid off roughly a thousand people, including the former chairman of Sony's UK division. Vivendi, which acquired Universal Music in a typical corporate mismatch, is rumoured to be offloading its entertainment division altogether. Perhaps most embarrassing of all, the titanic AOL Time Warner had to admit to a write-off of more than $100bn, the sort of figure that could put an entire country out of business.
The record companies have never had it so bad. The world is still saturated with popular music, but somehow its very omnipotence has taken the shine off its profitability: as popular as pop stars are, many of us have had enough of them, and the big companies have found themselves selling to a smaller, younger and less affluent audience with every passing year. If the basic market for chart music - which still drives the industry - is a shrinking population of pre-teen and teenaged girls, it's no wonder they're in deep trouble.
So often have disgruntled artists of many different stripes portrayed them as the bad guys, that it can be hard to feel sorry for the major companies. But that can be like berating oil companies while shooting along a motorway. The big labels have bankrolled many major moments in anyone's music library, and if a lot of what they sell is no more characterful than boot polish, that's pop culture for you. There has been an avalanche of CD piracy: in some parts of Europe, there are almost as many new releases pirated as legitimately sold. Napster, which made music freely available to download from the web, has devalued the CD for ever. The very durability of the compact disc itself, which gave back-catalogues such a boost when it first appeared, has helped undermine the business: many of us have all we want in our CD collections and it still sounds fine, thank you.
Cheer up, embattled biz CEOs! This is a very dark hour, but there are reasons for optimism. Follow my five-point plan for recovery.
1. Cut your CD prices. It is time the industry gave up on resisting this one. It's being considered even in America, where CDs have always been cheaper than here. Nobody considers CDs as luxury items now - go into a newsagent and see how many magazines give them away free. Yet full-price, undiscounted discs are still sold at £16 or £17. Hardly surprising that impulse buying and browsing are almost things of the past.
2. Talk to us old-timers. If you're over 25, you don't warrant much attention from the music industry. Absolved from peer pressure of any kind, we are an unusually inquisitive, even receptive, audience. The business has many employees in the same age bracket, yet they have never addressed the matter of how to hang on to record buyers as they get older, more affluent and more discerning. As the population ages, there's a danger that you will lose us altogether. Most greybeards (we're still talking 25-plus, by the way) buy only one or two CDs a year. Where did you lose the connection?
3. Find new ways to retail the music. High-street chain stores are hostile, humourless places as far as most would-be record-buyers are concerned. The most slovenly and arrogant of them all, Tower Records, has pulled out of the UK altogether. HMV may be the giants of the sector, but despite their frequent Biggest Ever Sales, their shops are expensive, curiously outdated places that never seem to have the record you want in stock. The democracy of the internet has enabled more dedicated buyers to get records through online retailing, anyway. Maybe it's time to cut out these middlemen altogether.
4. You don't have to say yes to another excess. Head-spinning figures for signing and maintaining superstar acts have made headlines far beyond the music business press. It's a bit late to start learning prudence, which is not exactly part of the rock'n'roll lifestyle. But what with the ridiculous costs of promotion, from hairstylists to video directors, someone high up needs to take a long, hard look at the spendthrift culture that the business has created.
5. Cultivate your Medici conscience. Never mind what shareholders think: one of your jobs is to look after the culture. The big record companies have behind them a brave and even visionary history of recording those artists whose music changed the world, from Igor Stravinsky to Bob Dylan. That legacy does not have to belong only to the past. Finding the next big boy band may keep the bottom line sweet for a while, but the audience wants talents that can transcend a sell-by date. So does posterity.
Richard Cook's most recent book is The Penguin Guide to Jazz on CD (£22.50)