SENDING OUT AN S.O.S. GRAMMYS SHOWCASE A MUSIC INDUSTRY IN SERIOUS TRANSITION MODE.

Byline: Fred Shuster

Music Writer

No record stores, no compact discs, concerts you download at home and albums you acquire by the song -- that's the future many in the music industry foresee.

But as music sales continue to slump on the eve of tonight's Grammy Awards at Staples Center, insiders say the brave new high-tech world, once harnessed, will provide all the rewards and artistic breakthroughs of the past. It will, they concede, take some getting to used to, especially for generations for whom a ringtone is an annoyance, not an important lifestyle accessory.

In today's fast-paced climate, where online tastes are scrutinized, diced and puzzled over like Zen koans, the only issues everyone seems to agree upon are that the music world is changing with the speed of sound -- and the Police reunion on tonight's Grammys telecast is the must-see event of the year.

Despite endless talk about a fractured global music universe consisting of small, loyal groups of instantly accessible consumers who eagerly buy music on a multitude of "platforms," it's the war horses that largely keep cash flowing in both the concert and pre-

recorded music markets. Last year's top-grossing acts included the Rolling Stones, Tim McGraw/Faith Hill, Madonna and Bon Jovi. Next year, the soon-to-tour Police are expected to be on that list.

Days of future past

"The older groups are the last ones that have mass appeal," said John Meglen, president/CEO of Concerts West, one of the world's largest promoters of live music. "We've been living off a lot of the acts of the '70s and a few from the '80s and a few still from the '60s -- and time is against us on that."

A quick glance at the charts shows times are a-changing. After more than a decade of rap's dominance, rock is making a strong comeback in the shape of Fall Out Boy, the Fray and My Chemical Romance, while country and r&b remain strong and new young singer-songwriters inch into the pantheon.

Tonight at Staples, more familiar faces will be called out: Mary J. Blige, the Red Hot Chili Peppers, the Dixie Chicks, Prince, Beyonce and others. But the most anticipated moment will involve a "Message in a Bottle," not the treasured golden trophies. In what's sure to be one of those rare "Grammy moments," the Police (singer-bassist Sting, guitarist Andy Summers and drummer Stewart Copeland) will perform together for the first time in public since disbanding in 1986.

"There's tremendous interest in seeing how it's going to sound," said record academy president Neil Portnow. "This is a special event we couldn't have anticipated six months ago. When you think about the songs, the musicianship and the personalities ... they resonated with millions of people, and they broke up in their prime."

It's no longer just a matter of nurturing popular new talent to replace the older models, says Larry Kenswil, president of UMG/eLabs, which is Universal Music Group's new media, business development and advanced technology division. "The question for the record companies is, what (new distribution system) will sell more music."

Nobody can seem to figure out where to put their energies. Signaling the eventual extinction of the CD, album sales declined in 2006 for the seventh straight year, although total sales were up thanks to a huge 65 percent increase in downloads (582 million tracks and 33 million albums sold). No matter how much attention MySpace and other social and music networking sites attract, the profits still go to Universal, Sony BMG, Warner and EMI, the four companies that control the distribution of more than 70 percent of the world's music.

And nobody's really selling much -- the most popular album in the country last month was the soundtrack to "Dreamgirls," which went to No. 1 on sales of 60,000 copies, the lowest totals for a chart-topping long-player in the history of the SoundScan era, which began in 1991.

Digital conquers all

Yet, as former EMI Music chairman and CEO Alain Levy recently suggested, the blueprint of a new music business is emerging after years of pain. Declaring the CD almost entirely buried, he said 25 percent of his company's revenue will be coming from digital within three years. Unfortunately, it wasn't fast enough -- Levy was axed a couple of weeks after making the pronouncement.

"The CD is about to fall off the same cliff as vinyl, cassettes ... but the problem is, piracy was there before the legitimate (digital) business," Kenswil said at a recent conference on the industry's future.

Some on the forefront of the new technology are even talking of trashing the age-old chart system. Terry McBride, chief executive of Nettwerk Music Group, one of Canada's largest independent labels and management groups whose clients include Sarah McLachlan, noted that a large number of kids are not going to a store to buy a CD or turning on the radio to hear new music.

Instead, he said, sales charts should reflect music streaming from such platforms as YouTube, Yahoo! and AOL; iTunes; actual CD sales; the download site eMusic; and RealNetworks.

"People are buying music -- only they're buying in the form of downloads, concert tickets, T-shirts, ringtones -- they're buying in a way that's intuitive," McBride said, adding he predicts a time when fans digitally purchase a favorite artist's album on a song-by-song basis, as the artist records them. Music downloads as soap opera.

Free Ozzy

There's more drama ahead. Some heavy hitters have even resorted to using the industry's dreaded "F" word -- free. Just last week, Ozzy and Sharon Osbourne broke the news that their 12th annual hard-rock tour -- the 25-date OzzFest (launching July 7 in Los Angeles) -- is pulling the plug on ticket prices and offering the show free to fans who download tickets from sponsor sites.

"We're reaching the same point we did years ago when kids no longer wanted to pay for overpriced CDs," Sharon Osbourne said. "As a result, they found alternative ways of getting music.

"That's what's happening with summer touring in this country -- it's outpricing itself. We started this and we want to keep it and we want to make it bigger and bigger each year by getting bigger sponsors to be involved with the festival and underwriting the festival. That's what it's about."

Tour sponsors are picking up the tab in exchange for the opportunity to align themselves with the OzzFest brand and reach millions on a one-to-one basis.

The world has taken a few major turns in just a few years. We're now living in a world with increasingly fewer record stores, and the chains that are left have made CD sales a low priority. Although not yet widespread, concerts can already be downloaded for home use while some artists are now selling their songs on the Web almost as fast as they can write them.

And as Grammys chief Portnow points out, not many are clamoring for CD cover art or liner notes in 2007, either.

"For a lot of people, it's a little hard to imagine (all these developments), having grown up with vinyl and transitioning to CD, and now envisioning the end of hard product," he mused. "But you have to realize that the technology is advancing almost daily, and at least one generation is growing up without any attachment or even interest in the physical product.

"Whatever happens, it'll be something nobody would've imagined 25 years ago."

Fred Shuster, [phone]

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Put your ear up to a Grammy

Roxanne, you don't have to turn on the red light -- switch on the TV instead to see the Police reunion that kicks off tonight's Grammy Awards telecast.

For the music academy's 49th annual trophy fest -- sure to be packed with the usual embarrassment of faux pas, wardrobe blunders and heavy-lidded, bleeped acceptance speeches -- the musical slots sag, sometimes even with star power.

Along with the first public airing in decades of the love/

hate relationship known as the Police, performers include the dependably bouncy Shakira with Wyclef Jean, Rascal Flatts with Carrie Underwood, Christina Aguilera, Beyonce, Mary J. Blige, the Dixie Chicks, Gnarls Barkley, Corinne Bailey Rae, the Red Hot Chili Peppers, Justin Timberlake and more.

How, you earnestly ask, can there be enough time in a three-hour show to note which of nearly 500 nominees will be honored in the 108 categories? That's exactly why the academy has the pre-telecast ceremony, essentially a drive-through micro-Grammys where 95 percent of the night's trophies are slapped into the hands of those able to rouse themselves early enough to attend.

Here, though, are some of the major categories -- the ones you'll probably see on TV, along with our predictions.

RECORD OF THE YEAR

Mary J. Blige, "Be Without You"

James Blunt, "You're Beautiful"

Dixie Chicks, "Not Ready to Make Nice"

Gnarls Barkley, "Crazy"

Corinne Bailey Rae, "Put Your Records On"

What will win: "Crazy"

ALBUM OF THE YEAR

Dixie Chicks, "Taking the Long Way"

Gnarls Barkley, "St. Elsewhere"

John Mayer, "Continuum"

Red Hot Chili Peppers, "Stadium Arcadium"

Justin Timberlake, "FutureSex/LoveSounds"

What will win: "St. Elsewhere"

SONG OF THE YEAR

Mary J. Blige, "Be Without You"

Carrie Underwood, "Jesus, Take the Wheel"

Dixie Chicks, "Not Ready to Make Nice"

Corinne Bailey Rae, "Put Your Records On"

James Blunt, "You're Beautiful"

What will win: "Put Your Records On"

BEST NEW ARTIST

James Blunt

Chris Brown

Imogen Heap

Corinne Bailey Rae

Carrie Underwood

Who will win: Corinne Bailey Rae

BEST ROCK ALBUM

John Mayer Trio, "Try!"

Tom Petty, "Highway Companion"

The Raconteurs, "Broken Boy Soldiers"

Red Hot Chili Peppers, "Stadium Arcadium"

Neil Young, "Living With War"

What will win: "Stadium Arcadium"

BEST FEMALE R&B VOCAL PERFORMANCE

Beyonce, "Ring the Alarm"

Mary J. Blige, "Be Without You"

Mariah Carey, "Don't Forget About Us"

Natalie Cole, "Day Dreaming"

India.Arie, "I Am Not My Hair"

What will win: "Be Without You"

BEST R&B SONG

Mary J. Blige, "Be Without You"

Prince, "Black Sweat"

Beyonce featuring JayZ, "Deja Vu"

Mariah Carey, "Don't Forget About Us"

India.Arie, "I Am Not My Hair"

What will win: "Don't Forget About Us"

BEST R&B ALBUM

Mary J. Blige, "The Breakthrough"

Jamie Foxx, "Unpredictable"

India.Arie, "Testimony: Vol. 1, Life & Relationship"

Prince, "3121"

Lionel Richie, "Coming Home"

What will win: "The Breakthrough"

BEST RAP SONG

Yung Joc, "It's Goin' Down"

Lupe Fiasco, "Kick, Push"

Ludacris featuring Pharrell, "Money Maker"

Chamillionaire featuring Krayzie Bone, "Ridin' "

T.I., "What You Know"

What will win: "It's Goin' Down"

BEST FEMALE COUNTRY VOCAL PERFORMANCE

Miranda Lambert, "Kerosene"

Martina McBride, "I Still Miss Someone"

LeAnn Rimes, "Something's Gotta Give"

Carrie Underwood, "Jesus, Take the Wheel"

Gretchen Wilson, "I Don't Feel Like Loving You Today"

What will win: "Jesus, Take the Wheel"

BEST COUNTRY ALBUM

Dixie Chicks, "Taking the Long Way"

Alan Jackson, "Like Red on a Rose"

Little Big Town, "The Road to Here"

Willie Nelson, "You Don't Know Me: The Songs of Cindy Walker"

Josh Turner, "Your Man"

What will win: "Taking the Long Way"

BEST CONTEMPORARY FOLK/AMERICANA ALBUM

Jackson Browne, "Solo Acoustic Vol. 1"

Rosanne Cash, "Black Cadillac"

Guy Clark, "Workbench Songs"

Bob Dylan, "Modern Times"

Mark Knopfler & Emmylou Harris, "All the Roadrunning"

What will win: "Modern Times"

-- F.S.

2007 GRAMMY AWARDS

What: Mary J. Blige leads with eight nominations, followed by the Red Hot Chili Peppers with six. Newcomer Corinne Bailey Rae has nods for record of the year, song of the year and best new artist. Show opens with the much-anticipated Police reunion.

Where: CBS (Channel 2).

When: 8 tonight.

CAPTION(S):

6 photos, box

Photo:

(1 -- cover -- color) POLICE STATE

Old groups still rule, but the music biz tries to change its tune

(2 -- 4) Beyonce, left, the Red Hot Chili Peppers and Mary J. Blige are among those who will perform at tonight's Grammys.

Photos by WireImage.com and Getty Images

(5) All eyes will be on Sting and his '80s band the Police, which will be reuniting on the Grammy telecast.

Mayela Lopez/Getty Images

(6) The Dixie Chicks, among tonight's multiple nominees, will perform during the awards show at Staples Center.

Lester Cohen/WireImage.com

Box:

Put your ear up to a Grammy (see text)