My post on Sunday about Apple cutting its customers’ legs off was written as a result of my frustration at not being able to do a simple thing – burn a DVD of a film purchased from iTunes. In the end I decided to rent the film instead and watch it on my iPhone. In the post I made a point of how the experience of buying music on iTunes was much better. Burning a CD of purchased music is no problem. Sure, there’s a limit on how many times you can burn a CD but there are easy ways round that.

Overall, I’m very happy with buying music from iTunes, Play.com, eMusic or any of their competitors. But what if I don’t want to buy music? What if I just want to listen online? Once you go beyond plain old-fashioned retail, the music industry’s digital strategy is a million miles off the mark.

Many gigabytes have been written online about the music industry’s problems at adapting to the online world. Cyndy Aleo-Carreira’s guest post on The Inquisitr today is one of the latest additions to this collective character assasination of an entire industry’s online strategy. Inspired by the near-death status of Pandora and the (supposedly temporary) closure of Muxtape, Cyndy predicts that the USA will become a wasteland of piracy if American music industry body the RIAA doesn’t change its attitude to online use of music.

Of course if you look at it entirely from a tech-centric point of view, it’s easy to forget that it’s not just the startups and their users that are losing out at present. Unless you’re a music industry fat-cat or a big-name musician it’s very hard to do more than scrape by in a career in the music world today. That’s mainly down to decreased sales as a result of file sharing and other forms of piracy.

How does the music industry react to a decline in business? The current strategy seems muddled at best:

- They’re actively working to stamp out piracy through a mixture of ‘Good Cop’ tactics (education campaigns, getting ISPs to send out warning letters to offenders) and ‘Nasty Evil Cop’ tactics (cosying up to the police a little to closely and suing old ladies). Which tactic individual file sharers end up on the end of seems entirely down to chance. Some get a gentle letter of warning, others end up fighting lengthy court cases. This leads to consumers developing a hatred for the industry and feeling like they have a moral defence for their piracy.

- They’re happy to license music to the Pandoras of this world, but only if they pay hefty fees. Now, I’m all for people paying to use music but it’s clear that the fees at present are so high that startups can’t afford to license music and end up either in a legal grey area (like Muxtape) or close to ruin (like Pandora). The music industry would argue that “if you can’t pay the fees don’t use the music”, but if these new avenues of catalogue exploitation aren’t being explored then who’s going to pay for the musicians (and the fat-cats) to eat? Those record sales aren’t getting any higher.

Surely it’s time for the industry as a whole to take a whole new approach, one that goes something like this:

- Fight low-level piracy by customers in a unified way. Some people being sued while others are getting polite letters asking them to stop is confusing and causes resentment amongst the customer base. Surely a combination of education, polite letters and (oh, I don’t know) giving consumers what they want might be the best approach.

- What is it that customers want? Besides those who will genuinely only download music because it’s free, they want to be able to download a vast catalogue of music that can be used on any device they choose. DRM is already on the way out, but kill it tomorrow and the world will be a better place.

- They want services like Pandora that introduce them to new music. Guess what? They blame the music industry when they get shut down! These services not only allow new music to be found, they also allow it to be easily bought through a simple link to an online store. It’s the kind of marketing that consumers love – they’re in control of it and it’s directly focussed on their needs. Set licensing at a level that these services can afford. Licenses can always be renegotiated in the future. For now, let these services grow – they might be your biggest customers in the future.

There we go – just three ways the music industry could change itself for the better. There are undoubtedly many more ideas they can try that don’t result in stifled innovation and annoyed customers. Let’s hope they see the light before it’s too late and the whole world becomes that ‘wasteland of piracy’.