Digital rights management is dead, according to an industry trend analysis report.

Andreas Pfeiffer, of Pfeiffer Consulting, said that in the short term music companies should forget DRM as it is not going to last.

"Embrace a DRM-free music environment," Pfeiffer urged. "Music producers must get used to this new world, because in the end it will make the lives of music producers easier, not more difficult."

Pfeiffer suggested that a relaxation of DRM would lead to new innovations in music technology.

"Once you have got used to the idea of a DRM-free world, perhaps a CD that comes with a code to download the songs to your computer, complete with lyrics and cover art, is not such an outlandish idea after all," he said.

Pfeiffer claimed that, even though music downloads are becoming the norm, there is still a need for a physical product, such as a download service that makes sure you get your music back even if you crash your hard drive.

"In the end, it will all be about the experience, rather than the object, but that experience will contain physical as well as digital components," he said.

"Both are essential, and neither will go away. The more we embrace this basic dichotomy of music-related products, the better we will fare in the market."

Pfeiffer maintained that physical products in any market stand a better chance if they are attractive and pleasant to touch.

"It might be argued that vinyl records would have fared better against the onslaught of music downloads than the CD," he said. "In fact, as a niche product, vinyl records may well survive longer than audio CDs."

• Pfeiffer trend analysis report: Why the audio CD is dying and what will replace it (PDF)