Big Content's methods of using copyright rules as a tool of punishment are causing the break down of the entire system, according to the EU's technology chief.
Digital agenda commissioner Neelie Kroes said creative industries needed to embrace rather than resist new technological ways of distributing artistic works.
Kroes said she was worried that the existing copyright system was not rewarding the vast majority of artists.
At a speech to the Forum D'Avignon thinktank, reported by ZDNet, Kroes said citizens hear the word copyright and hate what is behind it.
Kroes said that the system should be about awarding creative people but is being used as a tool to "punish and withhold".
She thinks that online distribution and cloud computing are a new way of purchasing, delivering and consuming cultural works and the existing legal framework around copyright is not flexible enough to take advantage of it.
Big Content has been moaning about the damage done to their industry by online copyright infringement for ages. Meanwhile governments and courts in countries have responded by blocking access to websites that help people unlawfully share music, videos, games and software.
Kroes said she intends to overcome the content industry's failure to agree on pan-EU licensing deals. She does not like the way that countries such as the UK tax e-books more highly than they do physical books.
But she said that while all this enforcement is going on 97.5 percent of artists earn less than €1,000 (£856) a month from the copyright system.
She did not provide any definitive answers as to what should replace the current copyright system, apart from saying those advocating new business models should get a fairer crack of the whip.