For the past six years, I have taken the stage as NARM President to provide insights into how your Association is working for you and your industry. I have also shared my own viewpoints on what forces are at work to help or hinder the future health of our business.

I’ve spoken about the external factors that have continued to affect what we do, from new technologies and formats, to piracy; from shifting consumer preferences and value propositions to the unforgiving economy. Some things are within our control; others are not.

Someone recently asked me if someone were going to write a self-help book for the music industry what should it be called. Somewhat offhandedly, I suggested, “How To Get Out Of Your Own Way,” meaning to be more self-deprecating than mean-spirited.

But moments after the interview, I did a quick Google search and, not surprisingly, found several books with this title and related articles with this theme. Reading about the importance of developing trust, cultivating healthy relationships, overcoming guilt, reconciling bad decisions, and being a better listener made me realize I had hit on something here that I wanted to share with you.

And I don’t think I’m alone in this realization. At a recent industry round-table, one of the participants observed that what the music business needs is fewer consultants…and a lot more therapists. The music industry just might be the world’s biggest dysfunctional family…and that’s not necessarily a bad thing if it provokes healthy introspection. It could even be a reality show that is more than ready for prime time. Viewers would be riveted to The Real Executives Of the Music Business.

We have chosen to work in an industry with jobs that are not 9 to 5. Whether you are an artist, manager, label executive, retail business owner, service provider, or technology innovator, you live, eat, sleep and breathe this business. And, I venture to say, so does your spouse, partner, kids, extended family, friends. The music business is about total immersion and we cannot expect what we’re experiencing to somehow elude those closest to us.

Let’s face it, in this business we’re a little more self-absorbed than the norm. And, honestly, it may be not working to our advantage these days. We have to not just understand our circumstances, but delve deeper to learn why we react and respond the way we do. Our future depends on our ability to look straight in the mirror and confront what we see there.

Does it appear that there’s a conspiracy against us wherever we turn? Or, is it that we are simply not sure if we have the resolve to do whatever it takes? Just consider the valuable takeaways from this type of self-reflection.

You know what? It’s OK to admit that we have a problem. I’ve been getting up every year, stumping on behalf of a party platform that seems everyone agrees with in words, but not always in action. Because of that, our industry is not reaping all of the benefits.

If we just revert to our comfort zones and cast aspersions at what threatens us, we won’t see that we may have reached that tipping point where coasting isn’t going to take us across that imaginary finish line.

It’s rough to see stability of what we knew get grey. I sometimes alternate between nostalgia and regret at the lavish nature of our previous life, and sometimes even feel a little resentful on how lean and mean we’ve needed to become, just like I know you have. But downsized doesn’t mean down and out, not by a long shot.

At our 50th anniversary, the salient point made about NARM was that the organization was founded to serve a perpetual need for music business partners to come together to advance

the industry. And that holds true today, as we trudge through the trials of a morphing marketplace. While the mediums may evolve, the core of the business remains the same, and NARM and our staff are here for you. But NARM has never been just me, my staff, the Board, or workgroups.

It’s you and your company, and none of the efforts that take place can be done in a vacuum. The most effective way the NARM staff can provide you with what you want and need is when you are not only heard, but when you actively listen and contribute. It may seem easier to say snipe from the sidelines when something isn’t done exactly to satisfaction, but perfection should not be the enemy of good. The opportunity to voice your concerns is there, and the only cardinal sin is not participating.

If you ever think the emperor has no clothes, pipe up, there’s no time to mince words. But be prepared to back up any Lefsetzian diatribes with a thoughtful plan of action. Instead of rationalizing a way to not move from our perches, how about asking, “How can we do this?” It’s not like our business is unique. Film, TV and news are all on equally dangerous, if not more precarious footing.

While the economy is showing certain sparks of re-ignition, too many are still out of work, and the slightest instability still triggers panic. During these trying times, it’s understandable to hold your cards tighter. But what many economists will tell you is that in times of financial downturn, the worst thing for a person with money to do is to hold onto it, and not spend it wisely. It’s called the Paradox of Thrift, and within NARM, we cannot risk a paradox of networking and ideas. Right now, in stressful times, that is precisely the time to shift old paradigms, and to act responsibly and thoughtfully.

The idea behind yesterday’s Town Hall meeting was to allow leaders of our industry to expose us to new ideas, and how to re-inject adrenaline into a physical marketplace that still represents about 75% of total album revenue.

This extends to our digital and mobile partners as well. For far too long there has been a deep chasm dividing the digital and physical world. But in reality, we’re all in the business of music, and trans-media partnerships that tie physical and digital components can only be good for music fans.

There’s an even deeper divide between what people perceive about companies that may have started on a darker side of the business. Many are trying to put their brain power behind new ways of providing musically oriented goods, services, and applications to customers who demand them. In fact, over the last several days we’ve seen some stunning developments with both a summary judgment in a major peer to peer file sharing lawsuit, and other services announcing settlements with all four majors. We hope that these events will encourage more partnerships to legitimize the social nature of sharing copyrighted material on the web.

I am pleased to say that NARM can truly be leveraged as a platform for real change. It has already gained tremendous traction with the diverse range of established and new companies that are populating our Digital Think Tank.

Part of listening is also about paying attention to the empirical data that we already have. While gut reaction takes us to a certain place, decisions can be better informed by the numbers.

According to the most recent IFPI report, revenues for the global recorded music market were $17 billion in 2009, a decline of about 7% from the prior year. The U.S. was down nearly 10.7% to $4.6 billion. Global digital revenue increased 9% to $4.31 billion. Digital now accounts for about a quarter of all music sales worldwide, and 43% of all U.S. sales.

The encouraging news is that recorded music sales were actually up in 13 markets. And, while the U.S. has yet to reach this milestone, six markets including Australia, the UK, India, South Korea, Thailand, and Mexico, experienced what the IFPI calls the “Holy Grail” growth in digital sales that was strong enough to offset the physical decline. And in the first quarter of 2010 here, SoundScan reports we’ve experienced a slight easing up of the year-over-year decline in CD sales.

According to a recent sales analysis by Billboard’s Glenn Peoples, it’s clear that consumers who want to make a special connection with an artist are still willing, and even content, to pay for recorded music. He admonished artists to not over-think the fine points, and not just to hold out for the access models of tomorrow. Find creative ways to sell copies of your music…now.

The digital music train isn’t stopping. While a la carte downloads may have shown some signs of leveling off, and the ringtone market is quieter these days, digital consumption is, without question, forever recasting our marketplace. As technology iterates at a faster and faster pace and the licensing process gets more streamlined, we need to look farther down the road.

Last year, I also talked about the need for a universal metric, and how we should re-envision the way we measure the success of artists and releases. Geographically-targeted real-time engines that merge, measure and visualize traditional and social results are critical to a true understanding of the market.

Exploring the opportunities and requirements for such a system are at the heart of what the Metrics and Sales Analysis Work Group under the Digital Think Tank has been set up to do.

For now, we need to think about the true nature of the semantic web. Our hardware is becoming more personalized and pulling information to us, rather than having us request it. We must embrace how our music life is inexorably linked to the rest of the information in the world, swirling around in the digital ether.

In the coming year, researchers and analysts will look more carefully at the seismic shift in music listening, not to mention exploring the near and long-term implications of the freemium model, especially in the context of new reports about a positive trajectory for online advertising.

We also need to examine what’s happening with recommendation innovations, the explosion in apps development, and growing opportunities at the intersection of music and gaming. While there are signs of collaboration with the ISP community that could have a positive impact on illegal file sharing, burning is more than commonplace. And we all see that legal social streaming is way up.

As cloud-based services allow consumers to play their home or virtual collections everywhere, as 4G and LTE become reality in major markets, and ubiquitous connectivity is within sight, we need not dig our heels in, but open our minds to connecting these experiences to create value and new cross-channel products.

In addition to the juggernauts that are the Apple iPhone and iPad, Android handset shipments have climbed to about 65,000 per day, that’s 5.5 and 6 million Android handsets shipped per quarter.

The hackneyed phrase ”think out of the box” no longer applies, because the box has been obliterated, whether we like it or not. It should not be about rushed quick-fixes that may offer short-lived incremental revenue jumps, and maybe even find a product that resonates with music fans. We need action that will not just stabilize our business but give it a chance to return to sustainable growth.

Can we successfully redefine the album? Some see it simply as a collection of songs sold at a slightly reduced cost than individual singles. But to a great many artists, the album is a holy body of work, that shouldn’t be sliced and diced.

Clearly, the days of it being that simple, are fading in an attention averse world that’s moving faster with each passing second. Just as consumers use social media to get their digital information and entertainment in bite-sized, easily digestible chunks, music products must also explore that mindset.

A number of physical product innovations and alternative sales strategies are boldly testing the consumer waters; WEA’s more frequent Six Pak mini-album; Trans World’s CD pricing pilot; and Universal’s Velocity program.

In a recent Billboard commentary on Record Store Day, Music Monitor Network President Michael Kurtz talked about luring the once-a-year record store day customer back into stores with serialized releases and collectible vinyl products.

Every product, from albums or digital downloads to apps, apparel, merchandise and ticketing are potential breadcrumbs into a larger ecosystem around an artist brand. He said it best as he closed out his update…”It’s not impossible. Nothing is. Record Store Day proved that.

It’s unquestionably time to experiment with new products and services. But we must also continue to work hard to add efficiencies and better analytical processes to our existing business. Yes, headcounts have been slashed across the board, but the industry can further help itself by reducing costs and paying more attention to what goes on under the hood.

Further streamlining operations, both physically and digitally, and adopting new, or enhancing existing, universal communications standards is of paramount importance. What also remains constant is the imperative for improved efforts to ensure consumer awareness and education, regardless of the delivery method. While we are familiar with all the jargon and what system is compatible with other products, the customer doesn’t care about today’s version of VHS or Beta wars, they just want it to work, and trust the level of quality in the product they are getting for their hard-earned dollar.

NARM has worked diligently during the past year on ways to help consumers discover deluxe products and to redouble efforts to encourage music gifting. Rachelle Friedman will be making two announcements about outcomes of these initiatives in her Chairman’s Message.

Education and awareness must include all partners from the product managers at labels who are the architects of the campaigns for their artists, to those driving the sales engines at distribution companies, to all facets of music retail.

This means the clerks at the point of sale as well as those engineering new online service models. NARM pledges to help provide an industry-wide knowledge base and communications platform to support this effort.

Look around you. These are your colleagues, partners, and I imagine some current and potential life-long friends. In a business notorious for executives only being as good as their last hit, if you’ve been in the music industry long enough, you really know it’s just as much, if not more so, about trusted relationships. As you go into your meetings as fierce competitors and/or business partners, remember that above all we are united in NARM to advance the business of music. And our trusted relationships extend beyond these walls to our customers as well.

So, no matter what the task at hand or the goal we’ve set to achieve, we should simply be asking each other again and again and again, “How can we find and deliver great music to fans?” In the final analysis, awareness, self or otherwise, without action is worthless.

I hope you all agree that we can break the mold and actually get out of our own way so we can accomplish anything together.

The Eagles sang, “So often in time it happens, we all live our lives in chains, and we never even know we have the key.“ Maybe we can use that key here at NARM this year.

Have a great Convention!