I'm a long time Prince fanatic. I *LOVE* Prince's music but the stuff he says when not performing music, not so much. I'll admit that in many areas, Prince is a nut. Aren't most of us?
Anyway... I think his point about the Internet is that, generally speaking, there aren't a whole lot of artists making money off of their works by distributing them over the Internet. There are a few monopoly sites / services who are getting the Lion's share of the money. Yes, there are a number of free music systems, or donation music sites where you can donate or pay what you want, but not really what Prince is looking for.
As many of you already know, Prince was an early Internet pioneer... creating several music clubs online to distribute his music. I think his main reason for stopping those is that people have very little control / discipline when it comes to pirating his music. With a later iteration of his online music club DRM was added but what a major pain that was for the end user (speaking for myself). Music without DRM gets pirated too much, and music with it is painful.
While I believe media piracy acts as a superior form of marketing, I'm guessing it would be hard to convince Prince of that.
So, from one aspect... online media content distribution has become just as corrupted as the pre-online... with only a handful of players making most of the money and to a certain extent, dictating the terms... and I think that is what Prince is talking about... and I agree with him... although I am encouraged by many of the free/donation type sites. I think Prince should be one of the first major artists to distribute content via some of our preferred services that are primarily independent music... to see how it goes before he calls it quits. I mean, giving away your CD in a UK newspaper is going to help your sales (compared to non-DRM Internet-based, easily pirated delivery) how?
I think if Prince gave his fans a chance, they'd be happy to donate... and just maybe he'd do as well or better as those efforts from Radio Head and Nine Inch Nails.