Music giant Warner is setting up a record label that will do away with CDs in favour of releasing small numbers of tracks at a time only on the internet.
Linkin Park recently demanded to be dropped by Warner
New and niche musicians will be signed to the "e-label" without the pressures or costs of recording, manufacturing and distributing full albums.
Warner chairman Edgar Bronfman Jr described the move as "revolutionary".
"Our most important job is to work with artists and help them hone their craft," he said.
Too many young artists were being dropped when their first albums did not sell enough copies, Mr Bronfman said.
"While the old system allowed an artist time to develop and grow, today's business is such that an initial commercial failure for most artists means they no longer get a second chance."
The e-label will mean Warner is less likely to drop an artist before they reach their full potential, according to Mr Bronfman. The firm can also keep track of which acts become fan favourites.
"At this new label, an artist can develop in a supportive, lower-risk environment," he said.
"An artist is not required to have enough material for an album, only just enough to excite our ears.
"Rather than releasing an album every couple of years, every few months the label will release 'clusters' - three or more songs - by an artist.
"And, finally, and perhaps most revolutionary, artists retain ownership of their masters and copyrights while signed to this label."
Major labels are increasingly embracing the digital age - but their activities have been largely based on the traditional release model.
Albums and singles are normally only made available to buy as downloads when they are released on CD.
Mr Bronfman said Warner was "excited by the power of digital distribution now available to every potential artist".
"We see our mission as not to control the means by which artists' voices are heard, but to amplify those voices," he said.
"And the more those voices are amplified and distributed through more and more channels, the more we empower consumers to make emotional connections to the artists and music they most want to hear."
The e-label's success will be measured by "our ability to identify and develop powerful creative voices", he added.
"As a music company, we also understand that our ultimate success lies not in preventing people from getting what they want but in providing it to them in new and exciting ways."
Wilco turned to the web after being dropped by Warner
Warner may have learnt from country rock band Wilco, who were signed to its subsidiary Reprise.
In 2001, they were dropped after Reprise refused to release the album Yankee Hotel Foxtrot because it was "not commercial enough".
The band put Yankee Hotel Foxtrot on their website for fans to download for free - and the response persuaded another Warner label, Nonesuch, to sign them.
Yankee Hotel Foxtrot went on to become their biggest-selling album and their online presence has helped them go from strength to strength, winning a Grammy last year.
Warner has also been embroiled in a struggle with Linkin Park, who demanded to be dropped, saying the firm's "diminished resources" would leave it "unable to compete in today's global music marketplace".