David Byrne offered the music industry some advice on evolving last week at the South by Southwest conference in Austin, Texas.

The former Talking Heads frontman called on record labels to end digital-rights management, which limits the sharing of digital content, and shift from manufacturing and distribution companies to more closely resemble marketing firms in the face of rising digital album sales.

Byrne predicts digital sales will outstrip CD sales by 2012. He said that year will be the "tipping point," much like the middle to late '80s, when CDs overtook cassette sales. Once download sales become the norm, Byrne said, it will allow manufacturing and distribution costs to approach zero.

"That is a fact," he said.

At that point, Byrne said, record labels will be faced with a choice: to ramp up marketing services to use music as a loss leader for tours and merchandise revenue, or to aim only for international stars of the ilk of Britney Spears.

"Artists need help," said Byrne, who said he's in the final stages of negotiating a new contract with Nonesuch. He said it's possible for artists to work completely independently of record labels, pointing to the success of Aimee Mann. But he said such a model won't work for smaller or developing acts, who need a team to provide marketing and tour support.

Byrne seemed to imply that labels aren't changing as rapidly as they should. He said the royalties artists receive for each CD sale is essentially the same as for an iTunes sale.