Most people listen to music, but do not buy it. To those who spend at least one weekend a month trawling the aisles of music stores, ending up with yet another Van Morrison album, this seems surprising.

But, according to Mr Jay Samit, head of new media for UK music group EMI, roughly 90 per cent of consumers do not purchase music at all. Almost everyone listens to it, whether on the radio in their cars or to songs played in bars, but few people shop for it.

Converting this vast number of listeners into buyers is one of the reasons why the music majors have this week embraced the Internet.

Bertelsmann of Germany, EMI, AOL-Time Warner of the US and streaming media group RealNetworks have just formed MusicNet, which will offer online subscribers access to their vast catalogues of songs.

Yahoo, the Internet portal, has teamed up with Duet - the online joint venture from the world's two largest music groups, Vivendi Universal of France and Sony of Japan - to sell music to online customers.

For the big music companies, the moves online represent a change of tune.

For most of the past two years, the established music companies have seemed threatened by music via the Internet. Napster, which has given Websurfers access to music for free, has been treated as a pariah. But having secured a legal victory against the Silicon Valley renegade, the music companies are suddenly more enthusiastic about the Web.

"The music companies have been slow to focus on the opportunities, having been fixated on the threat," says Mr Ashish Singh, a partner at Bain & Co. "They have moved from their defensive position of fighting piracy and also fighting Napster."

The irony is that Napster switched the music majors on to the Internet. Having seen it attract more than 65 million users in 18 months, they could not ignore the demand for music online.

But will people pay the music companies for what they got from Napster for free? Are there enough people with the digital hardware at home to make what is technologically possible into a viable, mass-market business? If so, is it the end of the CD? And, if not, why are the music companies making such a fuss about the Internet?

They believe people will pay for music online, but they are not sure how much or what for. The alliances announced last week did not give details either of the business models they had in mind or the prices they will charge for different services.

These are expected to include: pay-per-listen downloads; subscription fees for streaming music - in effect, advertising free radio by genre, so that country music fans will be fed a diet of Willie Nelson and Dolly Parton; and create-your-own record collections stored on a central server.

It is a "random walk", says Mr Singh, suggesting that, in the short term, the music companies will make life for music fans online more complicated as they feel out which business models work and which do not.

For Napster, which just a few months ago was the go-to site for digital download, the arrival of these new alliances means a much more competitive market.

Meanwhile, digital downloads will not replace the CD any time soon. The percentage of Americans connected to the Internet stood at about 44 per cent last year, according to Jupiter Media Metrix, and only a fraction of those have the equipment at home to download and listen to music in a pleasurable way. (Many PCs can play music but it is often tinny).

The reason music companies are so keen to be online is that they see limitless potential. Vivendi Universal has suggested that, within five years, digital delivery could help the music industry go from being a $40 billion (€44 billion) a year business to $90 billion a year. Jupiter Media Metrix is more conservative, suggesting US online music spending would rise to $1.47 billion this year, increasing to $5.36 billion by 2005.

The point is that the Internet opens up new revenue streams for music companies.

Knowing that a listener likes Van Morrison, digital delivery services could target them with a free "listen" to songs by Tom Waits or Nick Drake. This means more focused marketing - and higher margins - for music companies.

They also aim to challenge radio by offering streaming music. If they find a market for that, they will have turned some non-buyers into customers.