A friend sent me the following as a private message and agreed for me to post it anonymously.
It could work as a response to this:
Critical World Blog » New Models for Music as Business
or this:
They Dropped The Other Shoe « Disparate

Here goes:

About two years ago, when the iPod was The One True Ring of must-have tech
toys, there was an interesting NYT article I read (I think in the Sunday Magazine section) that mentioned that the reverse was more intentionally true: within Apple, it was the iTunes Store’s purpose to lure more iPod buyers.

In a different direction, those who survive only on the crutch of DRM seem to be having little problem getting all our devices reengineered to
forcibly respect DRM. (I’ve heard stories that they’ll even require “DRM data” to be policed even at the bus level.)

On the other hand, these two points notwithstanding, A causally benefitting B does not seem to contradict B causally benefitting A. I of course don’t think it’s unreasonable to observe that the iPod in turn helps people become used to having DRM present in their everyday lives.

I’ll say right out that I wish I had better concrete suggestions, other than that the current laws and interpretations are on an untenable course
that will eventually require too much regulation and restriction. Here’s what I have for now.

What is necessary in order to generate a profit in music, art, or any medium? There seem to be two dominant costs to offset: the production
itself, and the marketing that attracts people to willingly give their money in exchange for some sort of access to the product. I have comments
about both of these, which apply almost equally well to both the mainstream American music and movie industries.

The second item, marketing, seems to be the more obvious failure of the current system. Music company spokespeople routinely explain how “it
costs more and more money now to get people to buy an album”. They don’t seem to consider (publicly, at least) that they could be trying ways that are more effective for their target consumers. I stretch to find a common analogy, but it’s like doing any old task inefficiently and dumping more and more resources into it in a way that’s not really helping, and making
it everyone’s problem that you’re not more openminded. Most people to whom music is marketed happen to be younger-than-median, too. These people know how to use the Internet, and are more susceptible to new
routes of information spreading. Why not foster people’s natural information sharing that we are now witnessing, instead of using the old
model of injecting advertisements into our field of view?

The first seems simpler. It doesn’t take a huge contract or huge production budget to attract an artist, but more a contract that offers a decent living and means to produce. Focus more on musical talents that produce larger amounts of work and experimentation, instead of some giant
rock band that puts out one album every 2-3 years. Do people have any memory that people used to be musicians as a day-in-day-out job, and not just while occasionally “recording” and frequently “on tour”? Contrast the musical output of said rock band with that of any average jazz musician, or even with the output of pop acts in the late 1950s and early 1960s. If your community is more interconnected, and information is more conveniently available for people, the extra quantity of output will not become more confusing in your attempts to advertise it to people.

These things said, I suggest harvesting grass-roots music sharing and community building, with means to pay the artists built into the system so people have less disincentive to do so. Try to ecourage and reward communities that have interest in an artist as a means of building loyalty—-this might be much less expensive than present marketing. If
the quantity of music is higher, there will be less squabling over the payment over individual items. Make the incomes of the artists, or their
earnings for each piece, public. It will show people that the music comes at a cost, and give people incentives to pay artists directly for their
work. Also, in this model, artists can freelance agencies to try to find community promotion of their work, instead of being dependent on a record label for promotion and distribution. Dot dot dot.

Something like this will get coded up eventually by someone, and I wouldn’t be surprised of a large (non-)consortium of independent artists
sprang up to use it. The question I haven’t answered is how fiscally viable it can be made.

With regards to the movie industry, well, some things don’t ranslate over quite right, but in spirit much does. Focus less on the larger, less
rewarding, to-be-blockbusters movies, which seem to yield so little profit on top of the investment, and often so much loss. Film is harder to produce in quantity than music is, I admit.. but independent film seems to
be viable these days in any case. Again, I don’t really have the clearest picture.

Those are some thoughts. I’ll try to stop here, so that I don’t repeat myself, and so that I don’t get too much more overboardly idealistic.
Bottom line: there are other ways of trying to do business, that the big consortia seem to have chosen not to seriously explore, but which might
actually be beneficial for a large number of artists if they give it a try. (Or, which might not be.)