Hard drive failure, theft and loss are just facts of life. But they are facts that online music business has failed to account for, and that the insurance industry has overlooked. Something needs to be done.

I don’t know why it happens, and I don’t know how I manage to forget that it happens, but every year since 2000, the coming of the New Year coincides with disastrous computer failure — and I’m always surprised by it.

Perhaps I was the only person to catch the Millennium Bug, and it’s recurring.

In this instance, it was the external hard drive that sits attached to the main home Mac G5 where I keep all the music. Due to a slight malfunction, it irretrievably lost a few of its albums. Over 1,000 of them, in fact.

Now, that could have been a disaster if I didn’t keep backups, but even so, it’s a tremendous hassle — and there were quite a few on there that I had acquired since the backup.

Which got me thinking about insurance. As yet, insurance companies have not managed to get their heads around personal data loss. If someone breaks in and steals my CDs, I know I can get an insurance company to cover the loss. If my house burns down and my records all turn to melty pools of plastic, then I can get replacements. If my hard drive is stolen, burned, or smashed, I can get the device replaced — but not the thousands of files that were on it.

This is, of course, a problem now that digital downloading is an increasingly popular way of acquiring music. We are encouraged to buy pure data for our personal listening pleasure and we oblige because of the convenience and the sheer exciting range of what’s instantly available 24 hours a day from our own homes.

Trouble is, not only can we not insure it, we’re not supposed to be making copies — even for backup purposes.

Anything goes wrong — even a minor computer glitch like the one I had last week — and we’re faced with buying our music all over again. I’m sure I’m not the only one who has lost large collections of music to the vagaries of technology. And I know for a fact that I’m not the only one who’s dispensed with physical CDs more or less entirely.

It’s a disaster waiting to happen.

But, in fact, this represents a tremendous opportunity — both for the music business and for the insurance industry. Let’s take this proposal to an insurance company. Get in first with it.

For just — let’s say — £1 a month, you can register your digital music collection with us. If you get burgled or burned down, we’ll replace the music you had from our comprehensive library of all the music in the world ever.

Of that £1, the record industry gets a flat cut (on the understanding that this counts as sales, and the artists concerned should get a few crumbs). The punters only get to register what they actually own, but they are provided with software which can update the records periodically — or as they acquire more music.

We could help the insurers get a relationship going with several of the major digital distributors and aggregators, and then deliver the replacement music on DVD-R so the customer can repopulate their hard drive. I suspect that there’ll be a way that we can password-lock the disc itself, so that sharing is appropriately discouraged without having to resort to DRM on the original files. Online store credit can be given where rarities cannot be sourced or are not yet online.

An excess can be set that covers the cost of compiling and delivering the disks themselves. This would discourage data carelessness (‘oops – I’ve deleted an album again, can you post it to me?’) and still be well within the realms of tolerable outlay to retrieve a lost collection.

I’d sure as hell subscribe to a service like that — and it’s an ongoing revenue stream for all concerned, while providing much needed peace of mind for the music consumer.

I encourage sensible off-site data backup. This is a way of providing that as a service.

From the consumer’s perspective, the alternative is not to go back online and buy the music over again. Sorry, they’re just not going to do that. The alternative is that they will head straight for the p2p sites to get replacements. As far as they’re concerned, you’ve already got their money — and the loss was hardly their fault.

Trouble is, once they’re on Kazaa, and they’ve replaced their lost collection, next they’re looking around for what else is available… and you’ve lost them.

The music industry’s strategy has to be provide convenience and a better service. That’s worth money.