Cannes: Midem, The last day dawns on participants. And it seems like aeons since it began, while it was only on 21 January that it started. Strangely while attendance is up or nearly at last year`s levels so far, the mood has been rather sedate.

Of course there has been the usual mad partying at concerts with bands and artistes from England, France, Taiwan, Sweden, America, Cuba, banging away at their guitars and drums like they wanted to break them, screaming their voice boxes out. But as veteran phunk master the octagenarian George Clinton told the audience at Midem: "With the major record labels going the way they are, it looks like the music may well die. You don`t need the record companies any more. The Internet`s there maaan. As many singers there is, as many record labels there will be. "

Added Nelly Furtado`s manager Chris Smith: "If possible I would like to work directly with the telcos. It would be easier for the artistes. They have a large user base. It makes sense to release music only for the phone. The physical distribution like CDs is additional."

Truly that`s the issue that`s vexing the likes of Universal, Sony BMG, and EMI. Are they no longer going to be the centre of the music universe? Sales of physical formats like CDs are dropping like debris from the World Trade Centre. Digital format sales are up more than 70 per cent. MySpace, YouTube, last.fm, rhapsody are the new musical destinations for consumers. Ringtones and call back ring tones are all the rage.

IFPI, the global association of the recorded music industry, reported that digital music sales doubled in the first half of 2006 to US$945 million and accounted for 11 percent of world music sales. In the United States, digital grabbed 18 percent of the market; in South Korea, it snared 51 percent.

The panic buttons have been pressed. Record labels are reacting by slashing jobs, sacking executives. Top execs at at EMI and BPI in the UK have been given marching orders.

Hopefully, music executives are listening to the artistes. And to the consumer. The latter wants music on the go, they want to download it once, pay for it once, use it on any personal device. And not to have to ante up money again and again for different devices, be it the computer, the MP3 player, the car stereo, be it the laptop or the PVR.

DRMs have been damned because of the creation of vertical silos by the likes of Apple with its iPod-use-restricted iTunes library. And with Microsoft entering the fray with its Zune player, things might get a little complicated. "Interoperability is key," said Real Networks CEO Rob Glaser. "Keep it simple. That`s why the open MP3 format is the best. For the market to grow, the music labels have to change their mindset."

Some such as futurist Jacques Attali even predicted that music is likely to become free. "Someone will pay, but music is going to be free at the consumer end. It could be unobtrusive advertising or live events which will pay." The Long Tail author and Wired editor Chris Andersen pointed out that endorsements, live gigs, artiste patronage may end up being the new business model for music and its creators the songwriters and the singers.

However, technology providers such as Germany`s Coremedia Wilms Buhse say that music protection and payment for music is crucial. "You can look at options such as bill tags. Which will be small pieces of information around purchases by consumers.

The ISPs and Telcos have all the information you need about the consumers, they are billed, and hence they can be the collecting body for payments for music."

Clearly the year ahead is going to be crucial for the music industry. Hopefully, it will be a common digital beat that everyone will be playing.