And while users seem to have gravitated towards free streaming services, such as the online streams offered by their local radio stations, they aren't willing to pay $10.00 or $15.00 a month for a paid streaming service, such as Rhapsody's ad-free paid subscription.

In the U.S. only about 2 million users pay for streaming music services, said Ted Cohen, who is a managing partner for digital entertainment consulting firm Tag Strategic. And the number of paid subscriptions has largely been flat over the past few years, with about 5 percent of the Internet users worldwide paying for a streaming service, Crupnick added.

Microsoft offers a streaming music service for its xBox users priced at $14.99 a month, including 10 free MP3 tracks a month. Customer interest, however, "hasn't been what we hoped for," said Christina Calio, who is a director of music relationships at Microsoft.

"I think we need to demand more from consumers," Crupnick said. "Why are we being so liberal? Why aren't we talking about asking for more money for the product?"

The music industry could take a lesson from Hollywood, Crupnick suggested. He noted how the Hollywood studios have deliberately withheld their products in certain formats to spur revenue. He held up a DVD package of the 2010 movie "Inception," explaining that consumers could either purchase a deluxe Blu-ray packaged edition of the movie for $75, purchase a DVD for around $14.99, or watch it as a pay-per-view or rent it from a video store for about $4. Consumers, however, could not watch it for free on an existing Netflix streaming service. He encouraged the music industry to create a similar form of "artificial scarcity."