One of the most prominent digital consumption experts has compared the music industry's traditional business model to extortion.
Dr Jeffrey Cole, director of the Center for Digital Future, told ninemsn's Kylie Speer that music companies will have to find a new revenue stream as people look to purchase only the songs they want.
"I don't think the music industry is going to be a very powerful industry [in the future]," Dr Cole said following his talk at the ninemsn Digital Marketing Summit.
VIDEO: Dr Jeffrey Cole at the DMS
"They had a business model that was nothing short of extortion.
"It said 'you like two songs, you have to spend 16 dollars [to buy a whole album]'.
"Now I don't mean this in a bad way, but the music industry seems to feel it has a God-given constitutional right to make the money today that it made yesterday.
"The bottom line is there isn't because they were forcing us to buy stuff we didn't want to buy."
Dr Cole, who correctly predicted the decline of MySpace four years ago, said music companies should not have buried their heads in the sand when file-sharing came to prominence in the early 2000s.
"Consumers were coming to them, saying 'we don't want to buy the whole album, we want to buy songs we want'.
"My advice to [music companies] now is 'music isn't going to be owned, you're only going to sell the music, or at least the music people want — look for other revenue streams."
At the Digital Marketing Summit Dr Cole, who accurately predicted the decline of MySpace at a similar event hosted by ninemsn four years ago, said he thinks Facebook would remain a huge force for another four or five years before it starts to fragment.
"It's not going to be replaced by one big social networking community but it's going to fragment," Dr Cole told the summit.
He also said bosses should allow their employees to spend more work time shopping online or using social media sites because they make up for it while at home.
He said studies he has conducted show for every hour of non-work activity in the office there are three hours spent on work-related tasks at home.
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