NEW YORK -- It may be five years before consumers see decent webcasts or download entire CDs off the Net, but that isn't stopping the music industry, nor musicians, from dreaming.
"Just you wait," seems to be the unofficial slogan at Plug.In '98, an online music conference sponsored by Jupiter Communications, which wraps up today in Manhattan.
"Everyone's saying the same thing," said Hamilton Altstatt, audio director of a new Internet-based record label called MusicNow. "The time is not now, but it�s coming.
"So everyone's jockeying for position for when it's gonna hit, which will be when the technology catches up to the demand -- in, like, four or five years."
The conference brings together music and computer industry bigwigs for a series of panel discussions devoted to strategies, digital distribution, music-oriented online content, intellectual property, and cybercasting -- topics that raised a distinct sense of déjà vu in some attendees.
"The focus of online music [in the panels] really hasn�t changed over the last year," said Barry Sosnick, an analyst who follows online retailing for JW Genesis Capital Markets.
Others were more optimistic, focusing on how far the business has come, not how far it has to go.
"It's amazing to see how this industry grew in one year; how many more companies are out there," noted Nisreen Shocair, manager of electronic media for Columbia House and the company's new TotalE music site.
Sosnick's and Alstatt's comments were mirrored by reports from Jupiter's director of consumer content, Mark Mooradian, who shared the research firm's latest findings about online music sales.
"Revenues from digital distribution will be minimal, but there is market potential," Mooradian said. He predicts that digital sales will account for US$30 million by 2002, but even that represents a trifling 2.2 percent of the total online music sales ($1.4 billion).
The two greatest obstacles to growth, Mooradian noted, are portability and broadband access, followed by the need for more secure technology, greater storage capacity, and independent record-label acceptance.
Panel groups repeatedly returned to the question of when to favor digital distribution over streaming media. The other recurring theme centered on whether or not the Internet will kill existing business models altogether.
Responding to a question about whether the Web could make record companies obsolete, Kevin Conroy, BMG�s senior vice president of marketing, noted that "middlemen don't go away -- the pie gets some new slices."
Indeed, new media can co-exist with old media -- and perhaps even boost sales in existing channels, experts said. "TV didn't kill radio, video didn't kill film," said John Sykes, president of VH-1, in his keynote address Wednesday.
Sykes compared the Net to early cable TV, recalling some of the questions asked of him 18 years ago: "How will you make money off it? Aren't the profit margins too low? How do you sell to a niche market?"
One thing is clear, however: Interest in music sites is mushrooming.
Not only are there a lot of them on the Web -- 85,000, according to Sykes' figures -- but the attendance at Plug.In '98 and Intel's New Music Festival, which runs concurrently, is on the rise. Yesterday, it was standing room only.
Unfortunately, companies both large and small seemed more interested in hyping their wares as debating the issues important to the industry's future. This was true whether the topic was "tools that make music" or "the potential of webcasts."
Even Thomas Dolby's "artist spotlight" degenerated into a extended plug for Dolby's Beatnik technology. But by then, the capacity crowd had dwindled to about 30 people, most who were well on their way to checking out Plug.In 98's nighttime agenda: The 1998 Intel New York Music Festival.
