As the entertainment business literally falls into 2009, there is now no doubt that the old retail sales model is gone. As we had been predicting for three years, too many customers (and most of them heavy volume buyers) simply prefer the ease of digital delivery over physical goods.

Yes, there are still those who prefer CDs, but with retail sales down over 30% from this time last year (which was down over the previous year), there's just not enough up side to keep retail in the game anymore. Most people don't understand that all the CDs still sitting in stores are still owned by the record companies, and not the retailers. And the stores can return them any time they want. With Christmas sales down overall, inventory managers will be looking to return anything that doesn't guarantee sell-through. That ain't music.

So, what are we to do about it? Plenty. And you have to do it right now. Here's a checklist.

1. Get serious about running your business

Too many artists and authors have been enamored with owning their business, while having no plan to run it. Great, you own your masters and copyrights. But what are you doing about it? If you don't have a manager who is planning for the coming year, get one. If you don't have a cash flow plan that doesn't involve advances, make one. If you don't have a marketing plan that involves connecting directly with your fans, start yesterday. You cannot sit around and hope someone shows up with a bag of money.

2. Create  a full featured web site

Okay, I know that sounds self-serving, but does anyone really doubt that the Web is the way people prefer to find and connect with entertainment product? If you are just doing a blog or MySpace, and you have no ecommerce or site membership database, you're toast. You have to build community around your content and you have to be able to make money from that community. The best (and now only) way to do that is through a web site that can manage that kind of interactive content.

3. Email, email, email

We all complain about the pile of SPAM emails we get every day, but email remains the single most cost-effective way to connect with your potential customers. Email is not free, but it's the closest thing to free if you are used to spending thousands on print ads and having to way to measure the results.

4. Create a new live product

If you are like most artists and authors, you have almost no operating capital and you have no control over your previously released product. In fact, most artsts have no clue that most of their most popular releases are not going to be manufactured anymore, and their previous publisher(s) won't even let them manufacture their own product!

That means you need a new product plan, and you need one now. Going back into the studio takes too much time and money, and there's no guarantee you'll recoup your expenses. But a live recording can be done quickly, for relatively little cost, and it can be in the market within weeks.

We are working with one of the largest churches in America, Hope Church in Memphis, that has state-of-the-art facilities to host and record live concerts on a budget (they are a ministry, after all). For less than $10,000, you can walk out the door with a multi-track hard drive. If you know of a better, faster and cheaper way to maximize your most popular content, do it!

5. Buck up.

As an independent (and that's what you are, even if you still have a publisher), you need to surround yourself with optimistic, aggressive, creative thinkers. This is even more important for creative people, who are prone to depression and self-doubt. This is no time to wallow in self-pity. Your business depends on you being the CEO, and you have to act like a leader.

Need help getting organized and developing a plan? Here's three email addresses to get you started:

My email address: mjrapp@gmail.com
Hope Music Ministry Services: matthew@hopepres.com
Dennis Disney, a great manager/consultant: dennis@d2entertainment.com