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It's taken ten years, but finally the music industry seems to have woken up to the fact that music downloading is here to stay, and that if record companies want to profit from it, they have to do more than grudgingly accept its existence.

Since Steve Jobs' highly publicised open letter to the industry in February, record companies have made steps towards making legal downloading a better experience for customers, but ironically, Apple, the company that can be credited with kick-starting the industry, may lose out.

One reason is that Apple seems to have fallen out with at least two of the major record companies because of its insistence on doing what it believes is best for its customers - having a uniform tariff for downloads and allowing us to buy individual tracks rather than just whole albums, and removing restrictions on how customers listen to the music they buy. Record companies would rather vary the price we pay on a track-by-track and album-by-album basis, because it's how they have always sold records and CDs. And while EMI sided with Apple on the issue of removing Digital Rights Management, Warner Music CEO Edgar Bronfman described the proposal, outlined in Jobs' open letter, as 'without logic and merit'.

Since then, Bronfman appears to have had a change of heart, telling Goldman Sachs investors at a meeting in New York that he was thinking of removing DRM for Warner Music downloads. But if Warner does remove DRM restrictions, it won't necessarily benefit iTunes customers. The reason for Bronfman's change of heart is that he believes Apple needs 'some online competition'.

Perhaps the best chance of providing that competition comes from Amazon, which recently launched

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a music download service that sells DRM-free MP3s for less than Apple's iTunes Plus songs cost at the time. Strange then, given Bronfman's enthusiasm for competing with Apple, that Warner's vast music library is not available from Amazon's download store. Of the four major labels, only Sony BMG and EMI have signed with Amazon, leaving Warner and Universal on the sidelines.

Rather than sign with Amazon, Universal has had an idea of its own and has already recruited Sony BMG and had talks with Warner. It's a great wheeze and it goes like this: you and I buy, say, a mobile phone or a PlayStation, or (whisper) a Zune and as part of the package we get a free subscription to a new music download service operated by the record companies. That would be the perfect scenario for the likes of Warner and Universal: they control the show and don't have to deal directly with those troublesome end-users. Of course, it won't be free - the cost will be picked up by hardware manufacturers and mobile network operators and then passed on to us - but it will feel as if it's free and that's, apparently, important in the fight against illegal downloading. Because we music fans and iPod owners are, after all, little more than thieves who will get our music for free if we can, even if it means spending hours in front of a nasty, sluggish, Java-powered interface downloading songs from a teenager on a flaky dial-up connection in Kansas.

That seems to be the view of many record company executives, which is why Radiohead's recent experiment in user-chosen pricing is so interesting. The key points about the release of Radiohead's In Rainbows album are that the decision to release in this way was made by the band, it's being released by the band, without a record company, and you can only buy the entire album, not individual tracks. So far, despite the fact that you can choose to pay nothing, most people appear to feel honour-bound to make at least some financial contribution. To put it another way, when given the option of legally buying an album for nothing, most of us choose to pay something for it. That flies in the face of the belief that we're all blaggers and freeloaders. It will be interesting to see what the average price paid is over the first few weeks of the album's availability.