• by Wendy Davis , Staff Writer @wendyndavis, November 15, 2007

While the major music labels still seem skittish about the Web, some signs indicate that they're coming to recognize that digital distribution has its benefits.

"We used to fool ourselves," Warner Music Group's CEO Edgar Bronfman Jr. said at the GSMA Mobile Asia Congress, according to a report in Mac User. "We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong."

Bronfman reportedly went on to specifically praise Apple's five-month old iPhone. "You need to look no further than Apple's iPhone to see how fast brilliantly written software presented on a beautifully designed device with a spectacular user interface will throw all the accepted notions about pricing, billing platforms and brand loyalty right out the window," he said.

His comments are providing lots of fodder today for industry pundits, as they mark a huge backtracking from Warner's previous position. Specifically, Warner was among the loudest complainers that iTunes' uniform 99-cent per track pricing wasn't fair to the record labels -- a gripe that's very similar to one made by NBC, which earlier this year declined to sell new TV shows at the iTunes store because it wants more control over pricing.

Meanwhile, as executives like Bronfman rethink their positions, musicians are taking matters into their own hands. Radiohead recently released a new album online at pay-what-you-want pricing, while Trent Reznor and Saul Williams are giving people the choice of downloading their new album for free or paying $5 for higher quality audio.

And it's not just established musicians experimenting with free tracks. Today's Wall Street Journal reports on a new initiative by Rcrd Lbl, a joint venture of independent label Downtown Records and entrepreneur Peter Rojas, which will offer music online for free and without DRM restrictions. The music reportedly will be available for download from an ad-supported Web site, with sponsors including Virgin America Inc. airline, Nikon and Puma.