Why not just have a 20 dollar tax per person per year to pay into a pool. That pool will allow an average citizen to have access to unlimited content for official releases made by artists. The RIAA can then use technologies like bittorrent to distribute this content so they aren't paying a high cost for distribution. Taking this idea further, added content for those fans who really like a band could be purchased. Things such as bonus tracks, outtakes & live releases of concerts for 2-3 bucks for 15 tracks.
Competition could still exist in this system too as a small fee from the pool would end up with the label which the artist was a member of. In the case of indie bands the band itself would sign up as a label and get the same fees paid to them.