Digital music downloads have redefined the music industry and although this is much better for the consumer, the record labels are still trying to stick with their old methods that drive consumers to piracy. I believe that there are several methods the record labels need to adopt in order to save the industry and their business or record labels will become a thing of the past.
1. Abandon DRM
People have said for quite some time they want no restrictions on the music they bought legitimatly and they are just being treated like trash by the record labels. Amazon MP3 was the first to sell DRM-free Mp3s and iTunes recently went DRM free as well. People just want simple music files!
2. Let People Rip their CDs
When people bought CDs in their prime, they did not have any idea computerize media would become so prominent and why should people pay again for their music instead of just ripping, copying from disk to computer, and use them on their digital devices. The law around this has been a gray area for way too long and this needs to end because people should be allowed to copy music they legally own.
3. Let the Artist Choose the Price and Distribution Model
Several artists have chosen to distribute their music for free over the internet, and have let people try their music before they buy it and if they pay they get to choose the price. The two leaders of this movement were Radiohead and Nine Inch Nails. Radiohead also, distributed MIDI files of some of their sonegs so that listeners can make their own remixes and mashups. They also created the model of picking your own price and being able to buy if first for free and then go back and pay what you want.
These three practices will save the record industry and could restore faith of the consumers. This can save a large industry that has been poorly managed for a long time.