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Levels of classical music shipped to UK stores fell by over 2,500 units between 2003 and 2004, to its lowest point since 1986. The value of those deliveries shrunk by a quarter and, for the first time ever, classical music accounted for less than 5% of all album deliveries. While this may tempt commentators to believe interest in the genre is waning there are also signs that classical may be undergoing a modern renaissance in the live and digital spheres.

In total, downloads of classical albums grew by nearly 100 percent in the US last year. Radio 3 recorded over 1.3million downloads when it offered free Beethoven symphonies in 2005 and experienced record numbers of website hits with its recent Bach season.

Meanwhile Naxos, the first classical label to digitise its entire catalogue, now offers an online subscription radio service with over 60 channels of streamed classical content. The Philharmonia Orchestra recently broadcast the first orchestral podcast and The London Symphony Orchestra even has its own ringtones service. The Royal Scottish National Orchestra has combined both live and digital elements to revitalise its attendance figures - offering a live performance and an exclusive concert download for a meagre £5 entry fee.

Digital aside, the popularity of live classical is facilitating a new business model. LSO Live delivers in-concert recordings with all the excitement of a live performance while also cutting studio costs and orchestra fees. Instead of the usual advance, orchestra members receive a cut of any profits generated from the recording and, together, they own the label.

Sir John Eliot Gardiner's label SDG has gone a step further in its customer proposition, selling concert attendees a freshly-pressed recording of the classical performance they have just witnessed. The forward-thinking approach of these independents suggests new opportunities for innovative classical labels.

Live performance is also enabling classical to reach new audiences - as proven when ENO's staging of Wagner became the surprise hit of Glastonbury 2004. Meanwhile the London Sinfonietta last year worked with Radiohead guitarist Jonny Greenwood to produce two sell-out concerts at the Royal Festival Hall and have also collaborated with popular indie label Warp Records on two Ether Festivals and 19 sell-out performances in nine different countries, with a live CD of highlights due out in September.

The appetite for a new breed of live classical has even fuelled the birth of classical club nights including "This Isn't For You" and Classic FM spin-off Chiller Live. A recent "Urban Classic" event even teamed the BBC Concert Orchestra with a host of UK rappers.

But are such "crossover" events a welcome attempt at genuine innovation or do they risk turning classical music into a gimmick, no more likely to generate core classical music sales than Kanye West using an orchestra of pretty girls to punctuate his live concerts?

What next? Can classical music entice a new generation of fans via its embrace of digital, new business models and innovative new access points? And will this process necessitate a major re-think of the entire genre's image as "Symphonies" vie for space alongside "Scissor Sisters" in iTunes?