Regarding what record labels need to do to save themselves:
The remedy is to stop paying advances. The remedy is to go to a gross-revenues deal and tell an artist, “We’ll give you twenty cents on every dollar we get, but we’re not gonna give you an advance. The accounting will be simple: We’re gonna pay you not on profits — we’re gonna pay you off revenues. It’s very simple: The more successful you are, the more you’ll earn. But if you’re not successful, you will not earn a dime. We’ll go ahead and risk some marketing money on you. But if you’re not successful, you’ll make no money. If you are, you’ll make a lot more money.” That’s the way out. That’s the way the rest of the world works. (full interview)