Indie label bosses on the future of the single, MP3s and the "legitimate" download.

Record labels are changing rapidly and the biggest reason for this change is the MP3. "The iPod has got to be the coolest thing that's happened in the music technology arena since the Walkman," says Warp Records MD, Steve Beckett. And now record labels are finally embracing the very thing that is their biggest threat: the internet as a way of delivering music and, importantly, as a means of generating revenue.

"Our sources of income will diversify: there'll be less from artefacts (CDs and vinyl) and more from downloads and streaming," says Peter Quicke of Ninja Tune. Many labels are in the process of developing services which allow people to download single tracks from their back catalogue for as little as 60p. "We've done the odd test on our Warp Records site and the results have been surprisingly positive," say Steve Beckett, who launches Warp's download service next month. "We're just dipping our toes in the water as we did with Warp Mart, the physical mail order of CDs, and seeing if people want it."

But will people pay for legitimate services? "People have become so used to downloading music for free that to try and convince them to start paying for it is the most difficult part," reckons Twisted Nerve's Rob Cotter. "The majors completely shot themselves in the foot on this one, as they should have addressed this situation years ago. I don't know about you but if a multinational tells me not to do something it's only going to make me want to do it more."

Moshi Moshi's Michael McClatchy agrees that the legitimate download will become an important tool, but he isn't so sure that digital music collections will ever replace the real thing. "I've always had a sneaking suspicion that people like to have a tangible music collection," he says. "Something they can pick through, look at the sleeves and show off to their mates."

But the area where "legitimate" downloads are likely to have the biggest impact is the beleaguered singles market. "The traditional single will disappear and be replaced by a single track download," says Ninja Tune's Peter Quicke. "Although I expect some specialist formats will still exist - vinyl for example." Most agree. Steve Beckett: "Singles are a nightmare for us and for most companies. They're a hugely expensive format with which to promote artists' albums. I'll be glad to see the back of them, apart from vinyl which I still have an illogical fondness for." Rob Cotter also likes vinyl: "Maybe we'll do away with CD singles and just release radio only singles. I can see vinyl still being around long after CDs have joined Betamax in dead format heaven."

But there is a real possibility that MP3s, rather than killing the music industry, will in fact become its saviour. "I remember when the CD came along, everybody said the music industry was going to die," says Wall Of Sound's Marc Jones. "But what did it do? It completely reinvented the industry and gave it life for another 20 years." He may be right, but is it too late? Matt Walton 28 November 03