Bob Lefsetz has his 2007 Music Business predictions posted as well. His are a far more holistic view of the music business (including labels, artists, festival and traditional publications). He's got some great insight, even though I don't agree with some of his takes on the digital players (specifically Rhapsody and Zune).
He thinks Zune is dead. I think Microsoft will continue to pump money into it until they find a cure for death. Granted, the boys in Redmond have had some serious hardware failures (remember their brief foray into wireless routers, or UltimateTV?). But, many video game pundits wrote the Xbox off early on... but Microsoft decided this was far too important to their overall strategy to go quietly into this goodnight. I think the same will happen here, even though it may take a couple of years.
My other point of contention is with respect to Subscription Music services (he pinpoints Rhapsody, but I think it pertains to all). Bob seems to subscribe (no pun intended) that people want to "own their music" in the near-term (with subscription being potentially viable longer term). The thing that always has bugged me about that paradigm, is that people have never "owned" music. They own a specific recording or piece of plastic that it is delivered on. Pre-digital distribution, I bought CDs.... if I scratched that disc beyond repair, I didn't have the right to get another copy. I'd have to buy it again. Luckily the market and technology has progressed, in that, we can "own" a digital copy of the file (and redownload if it gets corrupted). That stands for both DRM'd and unprotected versions of the file.
For those that know me, you will know I am biased... I LOVE subscription music. To be it is not about "owning" music, but about being able to discover artists and albums that I would never before have access to. I can listen to millions of tracks (regardless of how I discover them). Those I like, I download. Those I don't, I just move on.
I completely agree that the issue the entire subscription music market has right now is being able to convey this value proposition to the mass public. I have been saying for a long time, that subscription music suffers from the "Tivo dilemma"... no one understood the value of Tivo, until they had one. Yes, it took time for people to understand the value, and the market grew relatively slowly as the value prop was spread virally - generally from people like me who would over-dramaticize it by saying (with a wink), "Tivo saved my marriage - instead of getting in trouble for not listening, now I can just hit pause and say 'yes dear?'".
I'm not claiming to be a marketing expert, but one of the (few) things I learned years ago in B-school.... market the benefits, not the features. People don't care about access to 2 million songs, they want to be exposed to music they know they like (or have a propensity to like based on their tastes).
My two cents (may, or may not, be worth more than your paradigms)....