Billboard writer Antony Bruno explains that major-label execs are still working to understand how to deal with digital music files as CD sales continue its inevitable decline. Though digital downloads have helped somewhat with the profits lost from "hard-copy" music, they stagnated over 2006, even as year-over-year numbers saw gains.ÂÂ Among other trends to anticipate, labels are looking to relax restrictions in releasing unprotected MP3s, seeking to reverse a decline in digital downloads and mobile phone content.

"The majors . . . have got to capitulate, or they will continue to have a fractured digital media market that will slow down and stagnate," says Terry McBride, president of Nettwerk Music Group, management home of such acts as Sarah McLachlan and Avril Lavigne.

Bruno's article points to five major players--Amazon, Limewire, Myspace, eMusic and Yahoo Music--that he says will define major-label attitudes towards downloading in 2007.