Just over a decade ago, if you wanted to obtain a copy of a song, you had two options: go to your local record store and pay around $12, or download it illegally.  Today, there are a variety of legitimate options covering the middle ground that were previously unavailable to music consumers (indeed, enough for Wired to presumptively proclaim “the age of stealing music via the Internet is officially over”).  However, the interesting part about this progression is that the record companies, those that had everything to do with igniting the initial physical widespread distribution of music, have had nothing to do with this new digital way forward.  And as many of us have noticed, they are now paying the price for their failure to explore new technological avenues in distributing intellectual property.

To highlight this misstep, just take a look at the newspaper industry.  A telling example of this industry’s willingness to progress alongside technology is the Daily, the newest large-scale journalism innovation, recently launched by Rupert Murdoch.  The Daily is a tablet-only newspaper that users can purchase for either $0.99 per week, or $39.99 for a year’s subscription.  While skeptics note that there is plenty of free news, proponents point out that tablets, like the iPad, give certain industries the platform to “reimagine our craft,” as Murdoch stated during the Daily launch.  For businesses, this reimagination includes capitalizing on certain facets of new consumer demands created by technology, such as tailored news stories sent directly to your device, high-quality digital photos and videos, and of course sharing options through email, Facebook, and other outlets with just one tap.

While the Daily believes that consumers will pay for the whole news “package,” including the multimedia and social experience involved, other news outlets have experimented with different avenues of keeping their financial head above water.  The Wall Street Journal is the number one newspaper in terms of circulation, in spite of a sizable $2.99 weekly fee for online subscribers.  The New York Times similarly employs a paywall (familiar to many of us), which provides readers with a “free preview” of a story before being asked to log in to continue reading (subscription necessary).  Here, the businesses believe that not only will readers pay for the higher quality of journalism, but also, that the fact that they have educated, paying readers ultimately bodes well for their moneymaking efforts in conjunction with advertising.

And still, there are other approaches.  The Telegraph in the United Kingdom recently announced a “metered charging plan” that attempts to retain casual readers while creating a loyal base of readers willing to pay for content after they’ve reached their free monthly limit of articles.

My point here is that the newspaper industry not only recognized that they were confronted with major issues in the face of new technology, but that they acted on it in their individual capacities.  Far from claiming that they have succeeded, the important aspect here is that they are all actively trying, and they realize that because all of the competing businesses are taking risks, they can all watch each other to learn what works and what doesn’t.  Simply put, competition is breeding innovation.

Record companies, on the other hand, have stubbornly clung to their old ways while iTunes, Amazon MP3s, Spotify, and countless others have handsomely profited from what could have been a massive outpouring of innovation within the music industry.

Rarely do people who are willing to pay for music buy it directly from the labels anymore, or even any group that represents them.  Instead, consumers go to Spotify, which is subscription-supported for paying users or ad-supported for those unwilling to subscribe, and Apple or Amazon which employ the pay-per-download method—all practices we see utilized by news sources.  These third parties are the ones that have transformed how we consume music over the past decade through experimentation and innovation, and they’re the ones making the money.  No one thinks to themselves, “I want the new Lady Gaga album,” and proceeds to go to the Universal Music website.

Indeed, the failure of record labels to recognize the potential for digital music sales has led a number of big name artists to abandon their previous “big four” record company.  One band to do so with a most artistic flair was Radiohead, who announced in 2007 that people could simply pay what they wanted—or pay nothing at all—for a digital download of their new album, In Rainbows.  Before recording for the album began, Thom Yorke, lead singer of Radiohead, told TIME, “I like the people at our record company, but the time is at hand when you have to ask why anyone needs one.  And, yes, it probably would give us some perverse pleasure to say ‘Fuck you’ to this decaying business model.”

It goes without saying that the Radiohead approach was tailored specifically to work with the kind of band Radiohead is, and it is by no means an appropriate blanket business model.  However, the focal point here is Radiohead’s mindset.  They rejected the extremisms of both sides—they ceased participating in, and openly spoke out against, EMI’s floundering business model, but they also refused to take the extreme standpoint of claiming all music should be free.  Instead, Radiohead used their common sense.  They looked not only at their own power as a band, but also at what their consumers want, and were smart enough to utilize that middle ground.

In contrast, big name record companies, recognizing that they have missed the boat, have tried to litigate or lobby their way to digital success.  We see powerful groups like the Recording Industry Association of America, consisting of many equally powerful record labels, pushing for legislation like the Combating Online Infringement and Counterfeits Act that place perfectly legal websites in the same basket as those infringing users who utilize the website to conduct illegal activity.

While the newspapers themselves recognized that they needed to adapt in order to survive, many record labels are insistent upon fighting to retain as much of the status quo as possible.  Lawrence Lessig, one of the foremost experts on copyright law, pointed out years ago (and continues to point out) that strict IP-protectionist laws would not only harm the consumer, but also severely stifle creativity within the music industry.

As of now, record companies’ futures remain uncertain, and that fact is particularly unsettling considering the plethora of proposed laws that have yet to be implemented (or even introduced) with regards to the regulation of digital content, consumers’ access to that content, and the monetization of that content by the industry.

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