OK, so we all agree that the old way of distributing music (and movies and software and anything else that can be easily duplicated for that matter) is just not working. Telling people that it is illeagal to give their friend a copy of the CD they just purchased for ~$15 only serves to inspire disrespect for the law in general.
While some things (like operating systems) should be open source and freely modifiable (is that a word?), this doesn't apply to everything under the sun. The creators of software and music and other such ethereal entities deserve compensation for their work.
So, let's say we smart free software advocates put our heads together and come up with a free music license that says artists will distribute their music through any media they wish, only charging for the cost of the disc or nothing at all in the case of MP3 downloads. (Sort of like buying Linux distros from places like CheapBytes). They can have advertisers and all that usual jazz on their web site to offset that cost.
Now, here's where we make this interesting...
When a particular artist's music is gaining in popularity, a distribution company can purchase the rights to the music and distribute it online for free and on CDs (or whatever medium you like) for only the cost of the media. This distribution company will pay the artist directly a certain percentage based on sales and download volume. They will be able to do this because advertisers will be flocking to them! People love music, and advertisers love people.
Does this sound familiar yet? It should. It's more or less the way network television shows are distributed today.
Naturally, this won't make as much money as the screwed up system we have now, but it will put more of the profits into the hands of the actual artists and not some record company. You may be asking, "What's to stop these 'distribution companies' from becoming as corrupt as the record comapanies we have now?" Well, for one thing, competition. It will be much easier to enter this market than it currently is. Also, these distribution companies won't be like record labels in that a single artist could sell distribution rights to any number of different companies (certain restrictions to this might have to be worked into the license).
The most important part of this distribution model is that you and I, as individual consumers, can download or purchase on CD an album of music and then give it to as many of our friends as we like (for free, of course). The only people that would have to buy distribution rights would be those that profited from distributing the music (or perhaps place a community-enforced cap on the number of people to which you can distribute before requiring that you purchase the rights).
I believe this model can be applied to software and movies (once they are out on video) as well with equally beneficial results.
What do you guys think?
PS - Sorry for the length...