Last night I attended the first in a series of events set up by MusicTank to discuss the possibility of “effective legitimate alternatives” to illegal music downloads – welcome to 1999 people.

This first event, entitled ‘Here we are now, entertain us’ was advertised as looking at what music consumers actually want and comparing that to the new services on offer.

Unfortunately, the organisers probably selected a handful of the most misinformed, self-righteous and short-sighted people in the music industry to be a part of the panel. Entirely self-obsessed, the majority of the panel seemed to be the back-slapping stereotypes of major label representatives portrayed in the likes of Spinal Tap. With a collective resumes that includes work with Orange, SonyBMG, EMI and Live Nation it was no surprise that the loudest voices in the room came from those who either had something to sell or a naivety about the subject that was supposed to be under discussion.

The main crux of the discussion seemed to be about giving customers (that’s you and I) bells and whistles to their download sites, different pricing models and getting control of the sale of recorded music back in the hands of those who – so the law tells us – own those recordings.

The one subject that got rapidly skated around when I dared mention it in a positive light was that of ‘illegal’ download sites and, more accurately, peer-to-peer (p2p) tracker sites. Amongst all the huff and puff of what probably constitutes constructive and open discussion in big office blocks in Central London, all the people with the loud voices and big paycheques were ignoring what was staring them in the face:

An item that can be perfectly copied by anyone has NO value

In longer terms, if you can copy something, why pay for it? If you can buy a DRM-riddled, poor quality download from iTunes OR you can get it from somewhere else in better quality for free – what is the average student (the largest market for popular music) going to do when they’ve got bills to pay (I’m not even going to use the term cr***t cr***h, although that is another argument)? Simple, they’ll ’steal’ it without any thought at all for the artist, the label head’s cocaine habit or the production staff that also need to be paid. They have their music in the format they want, it can go on their mp3 player and it can enhance their life.

Now, that ‘format they want’ comment is vital here, and another misinformed opinion the panel had was believing that consumers want quantity over quality (yes, really). Worldwide, music downloads generate around $2 billion in revenue whereas physical sales of music in 2007 generated $19.6 billion in revenue. So, almost to illustrate the major record industry’s appallingly slow – shoot-ourselves-in-the-foot – embracement of the new media age (something they’re still not managing entirely positively), legal downloads equate for less than 10% of total record sales.

What I don’t believe is that downloads have the right to replace pound-for-pound the revenue generated in the past by physical record sales. What I do believe is that there will always be a market for physical records, it will just be more niche and more independent market focussed. I mean, what will DJs spin if they can’t spin vinyl? What will music collectors and music lovers caress in their living rooms if they can’t stroke a hand screen printed 12″ sleeve of which only 100 are in existence? Vinyl, at a quick glance, has survived the birth of CDs, minidisks and cassettes since its commercial release in 1948. It is a format loved by millions, and that is the market that will probably still last into the foreseeable future.

Of course, it is more than naïve to suggest that any physical audio format will be able to generate enough income for the mainstream music industry to ignore the development of online technologies. What isn’t naïve is suggesting that theoretical art – that being art that you can’t hold, see or touch – has no monetary value. Of course it is valuable – but only to the artist and the listener – and it is this emotional value that removes the requirement for most record labels in their current state.

So, back to the title of the series – ‘let’s sell recorded music’ – the answer to the question ‘how?’ is, quite simply, look elsewhere. Terry McBride’s ‘Meet the Millennials’ report is a fantastic read for anyone trying to make money in this industry and tells you more than I could probably learn about modern day revenue streams. For this point on yesterday’s discussion though, innovation of music services by the likes of Apple will never work, the only chance labels have of squeezing money out of their recordings catalogues is by liaising with those they fear most – the pirates. Work with their fantastic distribution channels, learn from them what your customers want, offer your music up for free sharing and hope you can pick up fans that want to donate money or by the nicely packaged physical copy, don’t rue what you give away for free, embrace those who care enough to pay for your efforts.

For an example of how this could work, and why all people should avoid iTunes, read the story of The Flashbulb.