The Isle of Man's 80,000 residents could get a blanket license for unlimited music downloads.
The scheme, proposed at the Midem music market conference in Cannes, would see the island's residents paying a compulsory tax to internet service providers that would then see them sharing music legally.
Ron Berry, a representative of the Isle of Man government, is quoted as saying: "At the end of the day, we are not going to stop piracy, so let's embrace it".
The proposal is possible - depending on agreements being reached by the industry parties involved - as the Isle of Man is a self-governing British Crown dependency.
The record industry has greeted the suggestion favourably with Geoff Taylor, the CEO of the BPI saying: "If ISPs take the position advocated in the Isle of Man, we'd be in an enormously better position".