Every two weeks or so, I pack up my Taylor acoustic guitar, fill a backpack with CDs of my music, and head down into the New York City subways to work as a busker. I make good money, and I get to study human nature, too. For example, I can now tell from about 50 feet away whether a woman is likely to give me money. If she's walking fast, wearing headphones, angrily porting a briefcase, or chasing down one of her children, that's an easy no. She wouldn't throw a dime into Jimi Hendrix's case. But if she's dressed casually and walking slowly, there's a decent chance she'll enjoy the music, stop, and maybe buy an album.

This is but one of the lessons I've learned from performing in subway stations that I think could help the foundering music industry, or at least help the many talented musicians stifled by it. These lessons haven't gotten me rich, but my CD sells well, and I often make more money per hour down there than I do as a journalist. And while my sales and profits have gone up recently, the music industry has done less well. While their CD sales appear to have improved recently, the upturn is minor compared to the 15 percent drop in industry revenues over the last three years.

Different experts give different reasons for the general decline. The music industry blames young people who download music for free from file-sharing networks. Others, such as Josh Bernoff of Forrester Research, a Boston-area technology consulting firm, blame competition from video games and other entertainment. Whatever the reason, it's clear that the music industry's old business model isn't working so well. In that model, the major labels plucked out a few bands they believed would sell big and invested millions of dollars in the production and marketing these performers needed to catch fire. The industry defended itself against complaints by saying they were simply responding to popular taste.

In truth, the music industry functions like a cartel, and the public's preferences have been limited to what they've been given. To counter lagging CD sales, the record industry is hiring lawyers and lobbyists to squelch the new technologies that are changing the market. Last year, the Recording Industry Association of America issued hundreds of subpoenas to college kids who swap music over the Internet. Meanwhile, the industry's lobbyists have convinced Senator Orrin Hatch (R-Utah), himself a songwriter, to float the idea of allowing companies to access and even destroy computers whose owners used them to download movies and songs.

But these industry efforts are counter-productive. About 60 million people in the United States have already swapped copyrighted material over the Internet, and that number isn't likely to shrink. The times they are a-changin' and record companies need to figure out how to profit in this new environment. With all the modesty required of a guy who doesn't make enough money on most nights to buy front-row seats at a Mariah Carey concert, let me offer a few pointers.