While major record companies continue to struggle--racked by downloading teens, a creative drought and a bloated cost structure--independents such as Or Music are setting an example for the big boys.

"Companies like Or Music are really showing the way the independent sector should work," says Dave Novik, a music industry consultant and former RCA Records executive.

Or Music espouses a simple remedy for the tattered record business: Put the emphasis back on nurturing artists whom consumers will fall in love with and follow for years. He also advocates embracing the Internet.