The closure, which is apparently unconnected to the recently agreed takeover of PolyGram by the Canadian group Seagram, is part of a cost-cutting exercise. And it conforms to a pattern of events which has led to talk of an imminent apocalypse in music business circles. In recent weeks Chrysalis has also been "restructured", completing a process which has seen the EMI-owned label "practically downsized out of existence", as one industry insider put it. A number of this summer's festivals have been cancelled due to poor ticket sales. And after five years of rapid growth, sales of records are currently flat in Britain, and have actually fallen by 7 per cent in America. According to the NME, which last week ran an eight-page report under the heading The Great Rock'n'Roll Dwindle, the music industry is in the early throes of a depression which could be terminal.

Profound changes are said to be afoot, so much so that Alan McGee of Creation Records predicts "there will be no record companies in five or ten years' time", and that artists will instead download their music direct to consumers via the Internet.

While things may look alarming on the surface, those with long memories will recall that the music industry has weathered similar periods of retrenchment before. There was much pessimistic talk in the early 1990s, when sales of records were static and everything from computer games to comedians were being touted as "the new rock'n'roll", and there was a similar downturn at the start of the 1980s when the disco bubble burst.

What we are now witnessing is nothing so dramatic as the end of pop as we know it. Rather it is the latest turn of the wheel in a cyclical process that has been going on since rock'n'roll began in the 1950s. Indeed, the sense of déjà vu evoked by the current situation is overpowering. Here is Mick Farren writing in the NME in 1980: "It really does seem that rock'n'roll and its dubious cohort the recording industry are approaching a very serious crisis point. On the one hand you have a disastrous slump in record sales, on the other you have the advent of cheap, good quality home-taping equipment making the record obsolete . . . It's a revolution that could overturn the record industry as we know it."

Three years later the first CDs went on sale, the start of a technological revolution that triggered a phenomenal period of record industry growth.

Far from being on its last legs, pop is in one of its pre-revolutionary phases, at a point in the cycle that bears a marked similarity to the period of 1975-76 which preceded punk. Now, as then, the music business has become over-inflated, self-regarding and riddled with hubris. Successful acts such as Blur and Pulp have become remote and out of touch with the lifestyle and needs of their fans, while new acts can hardly get a look-in.

As in the pre-punk 1970s, to get a foot on the ladder nowadays you have to have some kind of pedigree and the full weight of a massive, carefully-orchestrated marketing campaign behind you. If you are a former member of Suede or the Stone Roses or Take That, or your brother is in Radiohead, then with a bit of luck and patience the money-men may eventually get you into the charts. But if you are a teenager who has just started a band in Leeds or Glasgow, then you have a five-year slog ahead of you, after which your demo will probably still not get any further than the front desk of one of the megacorp record companies in London.

Musically, too, a mood of decadent extravagance is abroad, next to which the excesses of the progressive-rock era of the 1970s pale by comparison. Albums by even relatively little-known acts routinely boast grandiose string arrangements, while rambling double-CDs encompassing the odd 20-minute "concept" suite have become the norm among the more serious end of the dance and drum'n'bass crowd.

So we probably are due a back-to-basics meltdown and what more fitting time could there be to usher in a new year zero in pop than the impending dateline of 2000? But pop and the industry that sells it will doubtless emerge on the other side, stronger, fitter and bolder than ever.