Peter Gabriel and Brian Eno joined forces to announce a new union for musicians at Switzerland's infuential World Economic Forum summit in Davos this weekend.

The union will be called MUDDA (Magnificent Union of Digitally Downloading Artists). The group is to help artists represent themselves as music moves from physical towards digital distribution.

Gabriel told the BBC: "We need a model partnership where every artist should have a controlling influence in the whole production process – if they want it," said Gabriel.

Gabriel, who co-founded Europe digital music wholesaler OD2, believes the music industry will ultimately have to "give consumers what they want."

Gabriel led a discussion at Davos, "How can you compete with free?", during which EMI Worldwide's chairman and CEO Alain Levy agreed that the music business had made the "cardinal mistake of totally ignoring consumers". Gabriel said that his belief is that "you have to compete with free by providing something even better."

During that session, the participants conlcuded that any successful business model had to offer: simplicity, "as the Apple iPod"; convenience; a filtering function; a peer-to-peer mechanism or function; new and attractively designed appliances; and "defined and undefined added value", such as quality, transparency or pricing."