Madonna, Radiohead Moves Rock the Music Biz

L.A. Reid represents an increasingly rare point of view, however. After years of institutional resistance to change, some label heads are now bowing to the realities of the digital age. On Oct. 5, new EMI chief Guy Hands sent out a surprisingly blunt memo written in response to Radiohead's pay-what-you-like pricing plan. The memo — which quickly leaked to the press — challenged EMI employees to find ways of capitalizing on digital music instead of stubbornly clinging to plunging CD sales. ''The industry has stuck its head in the sand,'' Hands wrote, criticizing what he sees as a culture of ''excessive expenditures and advances.'' Familiar criticisms, to be sure, but still shocking coming from one of the world's most powerful music executives. ''I think there've been some amazing people within record companies who have been awake to [the changing climate] for years,'' says Nettwerk Productions CEO Terry McBride, who oversees Canada's largest independent record company and recently gave away new Barenaked Ladies tracks online. ''What they haven't had was 'Let's go do it!' from the very top of the corporate structure.''

While nearly everyone agrees that the business is mutating, it remains frustratingly hard to predict what form that change will take. Columbia Records co-president Rick Rubin has been touting a subscription model, where fans could pay a monthly fee for unlimited access to thousands of albums. But really, nobody has a clue where this is heading. ''There will be new technologies we can't even imagine,'' says Martin Kirkup, who manages k.d. lang and Jamie Cullum, among others. ''MySpace is only about three years old. YouTube is less than two years old. They've fundamentally changed the relationships between artists and fans, and I couldn't have told you five years ago that I expected those things to happen. What I do know is there will be some great acts making great music.''

As for L.A. Reid, well, he agrees with that last part, at least. But it turns out this unusually savvy and successful exec's vision of the future is surprisingly...familiar: ''I hope it looks like it looked 20 years ago, honestly. It's really simple. The model for the future: Great music. Great artists. And people will buy it. There are many naysayers, analysts, and even artists and executives who have all pronounced that the record industry is dying. Well, I think they are the murderers. They are shooting bullets at the record industry, and they want to kill it. But guess what? It ain't dying. People still buy music. The difference is that people only buy music they really love, that is important or relevant to their lives, and they pay for it. They pay exactly what we charge. And they don't have a problem with it.'' But if you do have an issue with paying more for music? If you'd rather just download your favorite tunes for free? Well — to borrow a phrase from Radiohead — that's up to you.

(Reporting by Clark Collis, Shirley Halperin, Vanessa Juarez, Lori Majewski, Simon Vozick-Levinson, Margeaux Watson, and Chris Willman)