Although the Internet industry is still marginal compared to the traditional store album sales, it has been growing at a remarkable pace for the last few years. "There will be no record companies in five or ten years' time," recently predicted Alan McGee, producer of Oasis -- currently the most popular rock group in Britain.

"It will be sexier for bands to download their music on the Internet -- cut outthe middle man, the record company, and deliver straight to the fans for a cheaper price," he explained.

McGee's views are taken all the more seriously, given that he is a member of a working group on creative industries set up by prime minister Tony Blair.Internet users can already obtain compact discs by correspondence, and can download their favorite clips to their hard drives with a sound quality very closeto th at of CDs, thanks to the latest software advances in sound compression.

The most ingenious users have already begun to manufacture their own CDs "a la Carte," by combining elements from hundreds of available musical web sites, opening the way to widespread piracy.

Analysts believe that the Internet music industry could be worth $2.8 billion four years from now, compared to $70 million last year. Meanwhile, the pop record industry itself is in doldrums.

According to the British Phonographic Industry (BPI), compact disc and audio cassette domestic sales fell by 1.7 per cent in 1997, after many years of growth. "Nobody's selling any records," McGee said. "If anybody's telling you different, they are liars. There is a worldwide recession in the music industry... it's an industry in absolute crisis."

John Mulvey, of the specialist weekly New Musical Express, agreed. "It's fairly transparent that the mainstream music industry is going through a pretty messy time at the moment. Recently, albums madenumber one in the charts only sold 30,000 copies," he said.

"It's a threat but also an opportunity," argued Jeremy Silver, head of the multimedia sector of EMI, which owns Virgin Records. When Prince chose to sell an album on-line his success was only mixed, and he is an established artist.

"The music industry does not only produce the artists with their finished product, they market it, they promote," argued Sarah Roberts for the BPI. "It's always `we'll having your music out there, but if nobody has ever heard of you...'"

Music industry bosses are, meanwhile, closely watching progress in the market, ready to jump on the bandwagon when profits become more widely assured.

"And at the end of the day, when the medium become so useful and powerful so that we can work it efficiently, then the record company will be there and using it too," concluded Jeremy Silver.