Bronfman Likes Telcos in iPod Race

Looking forward, Bronfman said that revenue derived from what is imprecisely known as "digital" distribution -- that is, delivery via the Internet or another data network rather than via a physical medium such as a compact disc -- would go from 2% industrywide to between 25% to 27% in 2008, according to industry forecasts.

The music business is entering an "inflection period," Bronfman said, similar to the experience by the movie business in the early 1980s. That's when the value of filmed content increased, he said, because distribution outlets for video expanded from movie theaters and broadcast television to cable, videocassettes and other media.

"The music industry sits at the beginning of that odyssey," Bronfman said.

Among the revenue-generating opportunities for music in the mobile market, said Bronfman, are music videos, full-track streaming of music, ring tones and "ringbacks" -- the ring melodies that callers hear when they dial a particular number.

But the possibilities in the digital market can be blocked by real-world challenges, Bronfman indicated. One problem with the download market, said Bronfman, was the lack of interoperability. Songs that Apple sells online, for example, can't be played back on players manufactured by Dell (DELL Quote) and other companies, he lamented.

But Bronfman noted that Apple CEO Steve Jobs doesn't want such interoperability. And convincing Jobs of something he doesn't believe, said Bronfman, is "a herculean task for anyone I know."