"We never really made the digital transformation," he said.

The reasons behind this sales decline have been routinely debated at this conference over the past decade, the panelists noted. In years past, music executives put the blame on digital music piracy -- the easy and free sharing of music with Internet software like BitTorrent -- for eroding sales of recorded music.

At this year's conference, however, concern centered on the growing influence of free streaming Internet services, such as Rhapsody, MySpace, Spotify and even YouTube. Music listeners deploy YouTube as a streaming service, picking the songs they want to hear and minimizing the browser window, noted Eric Garland, who is the CEO and founder of BigChampagne, a media tracking company.

"We've given consumers an awful lot of options for free music, which they've certainly taken advantage of," Crupnick said.

While recording companies do get some revenue from free streaming services, it is a fraction of what they get from selling a digital track. Garland estimated that a record company gets only US$.0001 for each time a user plays one of its songs, which is far less than the average of $1.00 a track that is collected when a digital copy of a song is sold.