SINGING A NEW TUNE: Languishing sales forced Tower records to close its last outlet in Singapore at Suntec City. Later in the year, the American company went under, after 46 years in the music business. Music labels like Warner Music now plan to get into the download business by setting up kiosks where digital music files can be conveniently bought.

In the privacy of their homes, these same individuals might well be ripping music off the Internet in order to fill those music players - or laptops or mobile phones - with free music.

As a result, the music industry - from the record labels to CD stores - is singing a dirge.

From the point of view of the consumer who wants his music on-the-go, for free and in digital format, those shiny 12cm-wide discs that go for $20 a pop aren't of much use anymore.

The price is hardly a song for music fans in the 13-22 age group, who usually have tight budgets. Thus, it has become rampant practice to get entire albums from music 'sharing' sites onto digital music players, laptops and mobile phones.

Many do not think of this as wrong, although the Copyright Act here was toughened in 2005. Those convicted of unauthorised downloading, distribution or sharing of copyrighted music face up to six months' jail and fines of up to $20,000.

Last year, seven people had their homes raided by the police for music file-sharing. They are now helping with investigations.

The impact of what these people and many others are doing has hit the sale of CDs.

So has the flood of 'parallel imports' - cheaper versions of regular CDs pressed in countries such as China and Indonesia.

The Recording Industry Association of Singapore (Rias) said the value of Singapore's music industry, worth $60 million in 2003, limped in at just $36 million last year.

Retail CD stores have been more than bruised. Major chains like HMV and Gramophone have been fighting to stay afloat.

Sales revenues at Gramophone's nine stores, for example, have shrunk by 10 per cent to 15 per cent every year since 2005.

Gramophone's manager Roger Tan noted that pop- rock titles were still selling, but classical, jazz and older releases - which have less mass appeal and do not sell in the same numbers - are faring badly.

He added: 'This means that big stores with range no longer make economic sense.'

It is a fate that has befallen stalwarts in the past, and must worry stores that are languishing now.

American giant Tower Records folded in December last year after 46 years in the business.

In August, it closed its remaining Singapore outlet at Suntec City.

Earlier the same year, Tower had shut its two kiosks at Changi Airport, and in 2001, closed its flagship store at Pacific Plaza, which had been there since 1993.

In the fight to survive, the recording labels are merging to stay afloat. Big boys Sony Music and BMG merged in 2004.

In February, Warner Music made a bid to take over EMI Music.

And just last week, EMI agreed to a US$4.7 billion (S$7.18 billion) takeover by private equity group Terra Firma Capital Partners.

But even mergers are not a guarantee of survival.

Sony BMG Singapore's senior marketing manager Jay Tan said annual profits at his company - which has a grip on about a third of the record label sector here - shrank by about 20 per cent between 2005 and last year.

The folks at Universal Music, Warner Music and EMI Music are facing the same situation.

Clearly, digital music is the future, say local industry observers, but few players here have cottoned on to a way of capitalising on the new technology for profitable - and legal - mass consumption.

The sale of legal digital music here was sluggish last year: Only an estimated $1.3 million in revenue rolled in, noted Rias.

But things may be looking up. At the moment, Singaporeans can buy downloads from two major online music portals - Soundbuzz (www. soundbuzz.com) and ;Play (www.starhub.com/play).

At as low as $1.99 for a single track, the two sites are reporting steadily increasing sales.

The idea of paying for online music sits far more comfortably with American music lovers, who paid US$1 billion for digital music last year.

The music giants are taking tentative steps in a bid to fight back.

For example, last month, EMI started selling MP3 files without anti-piracy software, which prevents consumers from making copies of songs.

Another move the labels have made is to start promoting their artists' music via legal download websites such as Soundbuzz.

Warner, Universal and EMI have done this.

These record labels have also issued limited-edition CDs, which come with extras such as music videos and bonus tracks to entice buyers.

But Universal has done the opposite as well - launch a line of no-frills, local- edition presses (LEPs) which sell for $11.90 - about $6 less than regular CDs.

This is their answer to those who find CDs too pricey.

But the lower price means consumers get less.

For example, instead of 16 pages of song liner notes, they get a four-page version.

Fighting music theft on the price front has seemed to work: Within three months (ending in December last year), six in 10 CDs sold on Universal's label were LEPs.

The music label giants have also reckoned that if they cannot fight the download phenomenon, they might as well join it.

Warner Music, for example, has begun talks with an investor to set up kiosks where MP3s can be sold and downloaded conveniently.

Record labels are also tying up with Apple's iTunes Music Store to earn licensing fees for music tracks sold online.

With the iTunes store rumoured to be coming to Singapore later this year, more people are expected to switch to legal music downloading here.

An analysis of the Asia-Pacific music market released by Soundbuzz in January has predicted that globally, digital music will eventually outsell CDs by 2009.

Meanwhile, sales of digital music players have skyrocketed. Apple sold 100 million units of the iPod, the world's most popular digital music player, since the gadget was introduced in November 2001. Apple declined to provide figures for the Singapore market.

Rias chief executive officer Edward Neubronner said the key to tackling illegal downloading ultimately lay in educating people.

He said: 'It is important for young people to realise that there is a value to the music they love and that they shouldn't take it for granted.'

sujint@sph.com.sg