ike a lot of music fans roaming the Internet these days, David Bishop registers one basic sentiment when he thinks about the record industry. "They're a bunch of greedheads," he says. "They've been really fat on what I think of as huge profits and now they're trying to maintain the status quo."

Mr. Bishop is not your typical college-dormitory Internet pirate. A 49-year-old illustrator in San Rafael, Calif., he has steered scrupulously clear of file-sharing software like Napster and KaZaA. But he recently discovered how to play the music provided by other online fans without copying it, and has no compunction about flouting recent efforts to stamp out the practice.

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"I'm not doing anything wrong," he insists.

Until recently, music executives have largely failed to acknowledge the millions of individuals, from teenage Eminem fans to Elvis-obsessed baby boomers, who have joined in what amounts to an online rebellion against the industry by some of its most important customers. Hoping to end Internet music piracy by ridding the world of the technologies that make it possible, they have so far focused on legal battles against KaZaA and its many brethren.

But for the first time in the Internet file-sharing wars, record industry executives have in recent weeks started to address music fans directly, both offering carrots and wielding sticks to persuade people to buy their product again. How well they succeed is likely to determine the way music is produced and consumed for years to come.

"The technology has destabilized us, it has hurt us," said Doug Morris, the chief executive of the Universal Music Group, a unit of Vivendi Universal and the largest of the five major record companies. "But now it's going to take us to new heights."

The industry is pursuing lawsuits against music pirates but is also offering new ways to legally listen to and buy music online through deals like a recent alliance with Apple Computer.

That prospect may be difficult to achieve. Forty-three million Americans — half of those who connected to the Internet — used file-sharing software last month that allows people to copy music without paying for it, according to a survey by the NPD Group, a market research firm. The file-sharing program KaZaA, which rose in popularity after the record industry won its lawsuit against Napster, has been downloaded more than 270 million times, more than any other free program available on CNet's Download.com site.

The migration of music from shiny disks to the online arena has personalized debates about intellectual property rights once reserved for lawyers, turning passive consumers into political activists in increasingly large numbers. Having discovered the virtues of the new online form, many people are demanding the freedom to sample, trade and make available music in ways that were never before possible.

Some of those ways, like making unauthorized copies of hundreds of copyrighted songs without paying for them, are clearly not legal. Others may be the subject of a negotiation that the music industry is beginning to accept it may have to enter into.

"I have rights to listen to my music the way I want to," said William Raleigh, 33, a marketing manager in Los Angeles who says he never buys music produced by the major record labels, preferring to reserve his acquisitions for independent bands that sell CD's through the Web site CD Baby. "I'm not a criminal if I want to share it with some friends, and I'm opposed to the technology that tries to restrict my rights as a consumer."

Paul Vidich, an executive vice president with the Warner Music Group, a unit of AOL Time Warner, said that the degree to which people could share their music was a key point in the company's negotiations with Apple. They explored what the equivalent of playing music in a living room full of friends would be in the online world. Would it be O.K. for students in a dormitory room to share music with the room next door? With the whole dormitory?

They settled for now, Mr. Vidich said, on agreeing to allow the ability to share with people under one roof, or a radius of about 150 feet.

"What is personal use, where does it stop, where does pirated use begin?" Mr. Vidich said. "That is one of the questions that this whole Internet phenomenon has opened up and we all need to address it."

In response to a prolonged sales slump and a federal court decision in April that found the companies that distribute the file-sharing programs Morpheus and Grokster were not violating copyright law, record executives now say they are girding themselves for a new era.

They say they are responding more actively to legitimate consumer demands and are willing to brave the backlash that may come from pursuing legal action against individuals for making unauthorized copies of music in their homes.

They are also hoping that relinquishing some control over their product may also ultimately boost their profits. After all, Hollywood movie studios once battled the VCR as a threat to theater attendance — only to see that technology spawn the hugely successful home video business.

"We've turned the corner," said Andrew Lack, the chief executive of Sony Music Entertainment. "When there weren't legal, good places to go buy music online the activity was cool, but once we get these services up, it's going to change people's behavior."

With the unveiling of the Apple music service in April, the major record firms have overcome much of their fear of cannibalizing compact disc sales with cheaper, easily copied digital downloads. They licensed their catalogs to Apple on more liberal terms than they had in the past, letting the new Apple music service sell songs for 99 cents. In just over a month, the service has sold more than 3 million tracks, far exceeding the record industry's expectations.

Bill Collage, a Sag Harbor, N.Y.-based screenwriter who has regularly used file-swapping software, said he has spent $60 at the Apple store since it opened on April 28.

"It's solved all my problems," Mr. Collage said. "It's so fast, and there's no guilt, no recriminations."

Last month, Sony and Universal sold their jointly owned online music subscription service, Pressplay, to Roxio, the company that purchased Napster's name and assets after it filed for bankruptcy. The Pressplay service, in which the two record labels retain a stake, is expected to be reintroduced soon bearing the Napster name — an acknowledgment by Sony and Universal that the service would be easier to sell to consumers under the brand that most epitomizes file-sharing.

And RealNetworks announced last month that its subsidiary Listen.com was dropping the price it charges subscribers to its Rhapsody online service to buy songs online to 79 cents.

These efforts to make purchasing music online more consumer friendly are being deployed even as the industry takes more aggressive legal action against online piracy.

After settling lawsuits against four college students accused of running "mini-Napsters" on their college campuses last month, the record industry's trade association is preparing to file lawsuits solely against individuals who have used software programs to let others copy music files from their personal computers.

"We have the right to control the property we own the way we want to," said David Munns, the chief executive of EMI Music North America. "To be successful I have to listen to what the consumer is telling me, but if that means me going broke that's not the answer. You've got to do what you've got to do."

The industry's position was bolstered by a ruling last week by a federal appeals court that forced Verizon Communications, a major Internet service provider, to hand over the names of four individuals whom the record industry suspects of illegally trading music using KaZaA.

The first lawsuits are likely to be filed this summer. "We're going to continue to address this with harsher and harsher means," said Mr. Morris of Universal. "If people are criminals I'm not concerned about alienating them."

As the file-sharing era has unfolded, Mr. Morris and other top record executives have largely remained silent, letting the leaders of its trade association, the Recording Industry of Association of America, speak out against piracy and field the fury of many music fans. (The association's Web site has become a favorite target of computer hackers).

Several executives said they have been spurred to take a more public role now because of persistent misperceptions about the costs of their business. Consumers think CD's are too expensive, they say, only because they don't realize how much the labels spend developing and promoting new artists, the vast majority of whom never sell enough to make back the investment.

Those costs have grown as radio stations have consolidated and stores like Wal-Mart, with less shelf space for CD's, are replacing stand-alone record stores as the main retail outlet for music, record executives say. Part of the industry's new strategy is to create a consumer education campaign on music industry economics.

Meanwhile, the industry's critics are calling for a more radical restructuring of the way music is distributed online. The Electronic Frontier Foundation, a San Francisco-based civil liberties group, is organizing a campaign to rally students to push Congress to create alternative approaches that would legalize some forms of file-sharing.

One would require record companies to license their entire catalogs to anyone who wants them for a fee set by the government. Another approach would levy a tax on Internet service providers and, perhaps, other related businesses to create a fund that would be used to compensate copyright holders based on a measure of how frequently individual songs are downloaded. For consumers, the tax would be less noticeable than directly charging for the music.

"Right now copyright law is broken and the music industry is bullying everybody into being scared," said Shari Steele, the foundation's executive director. "There are new ways of distributing music that don't require the record companies to be a part of it."

For its campaign, the group has paid for an advertisement, to be published in Rolling Stone and other publications next month, showing five people standing in a lineup with headphones on. "Tired of being treated like a criminal for sharing music online?" it reads. "Filesharing is music to our ears."

Roger Ames, the chief executive of Warner Music Group, said any plan that handed control of the industry's licensing to the government would simply shrink its revenues and prevent it from financing artist careers. As for the taxation idea: "It sounds like communism," Mr. Ames added.

However unlikely Congress may be to order the music industry to act differently, some analysts and many music fans argue that the record labels need to do more to wean people away from file-sharing services. For better or worse, the Internet file-trading bonanza of recent years has given lovers of popular music a taste of what it means to have near-instant access to almost anything created by their favorite performers for free, to use their personal computers as listening stations, to burn their own music mixes on CD's and e-mail songs to their friends.

"There's a lifestyle issue about how people want to use music that has been missed," said Russ Crupnick, vice president of the music division of NPD. "The industry needs to reconnect with consumers and understand what they are seeing here besides the free part."