Digitally watermark the content and make it freely available. Not copy protected or any of that impeding horseshit that basically renders it unsavory and unportable, but rather traceable, and to no nefarious end - not spying on end users for later litigation, not for tracking demographic usage, not to make your intelligent and cultured and beautiful audience, who wants, needs the emotional support mechanisms of stories, music and so on to enrich their lives, but rather so that the artist is paid for usage. Where does the money come from?
Record labels need to look at radio for their answers: a license is paid by whomever is making the content available (and being a strong aggregation and tastemaking hub, bank on huge numbers of eyeballs to earn ancillary revenue via AdSense style referals) and then a central pool of license capital is distributed to artists by way of digitally-distributed royalities. A digital ASCAP, SOCAN, Harry Fox, SESAC, BMI etc. This agency is not one of the existing royalty collection and distribution agencies, however, because those in existence are built for the purpose of existing systems. The new agency is primarily interested in digital watermarks, pattern recognition and digital security; they need to ensure the watermarks are persistent, unhackable, and traceable. The artist is paid based on usage of their material up to a number of degrees of separation from their original source. So that if it originated at HeresTheBestQawwaliMusicInTheWorld.com and has passed through five or six iterations of end user it begins to erode in its weight within the system.
Clearly it would be ludicrious to suppose that a royalty could be paid on number of times played - the system would hold no water and what's more, be completely abused.
The problem of having to introduce a watermark reading mechanism into existing or emerging technology is also one that should be avoided because as we have seen, there are rarely standards, only competition, from the various companies as each vies to create the patent standard upon which all others must rely and so we get unnecessary diversity in systems. So the method for cataloging the legacy of a watermark and its usage would have to arise from existing systems that have proven to stand the test of time. I am thinking on what this will be and will post shortly.
The central pool of money, of course, does not merely need to be generated by large broadcasters (in whatever form they may appear), but also, could come from the end users themselves. Much like Satellite radio which subsists off subcriptions, the end user could pay an annual fee to just have access to music that they can mash up, remix, redistribute, and so on as they please. Like paying the milkman for delivering a daily necessity - milk. It just becomes a part of one's life - a necessity, and assumption of persistence. Why shouldn't it be considerded thusly? We all listen to music. I have met perhaps two people in my entire life that have claimed to not "be into" music, and I have met far more people than that in total =) (granted I have not visited some of places in the world where music is frowned upon but those places are not the focus of the market I am addressing). The only thing that has changed with music and the demand for it is how that has been represented or tracked. It was once live, then written to parchment to be re-created at a later time by musicians, then recorded and distributed on wax cylinders, music boxes, player pianos, vinyl, 8-track, cassette, video cassette, CD, DVD, mp3, ipod swapping etc.
That many people could listen to a vinyl record at once does not change the fact that pirated copies of a CD that someone had to buy or otherwise obtain, were uploaded and then played for a group of like-minded people being entertained around a digital campfire by their digital host/tastemaker/storyteller etc. So music is always there and always being disseminated post manufacturer. It's how it goes. Someone buys a loaf of bread and brings it home, everyone partakes of it. But you pay taxes to live in that home. You pay for running hot water. You pay for your garbage to be collected. You pay for your 600 cable channels. You pay for electricity. Not everyone in the household does, but the fact that many in the household use it frugally or otherwise affects the monthly bill. An artist should be compensated in the same way for creating what can be, if one observes usage patterns, deemed a necessity. It can be qualified as a necessity because it is pervasive and ubiquitous. Imagine if recorded music disappeared from the world altogether. Just gone. And the ability to ever make it again vanished in kind. Seems a little ludicrous and unthinkable and perhaps a little unnecessary doesn't it? Just like the idea that oil could ever really run out, that electricty could expire, that the oceans could become saturated with pollution, that we could actually affect the global climate to the degree of mass destruction.
Artists are channelers - some in league with the Zeitgeist, others timeless searchers for meaning and myth within their experiences. We require this to find for ourselves something that we can connect to socially and realign ourselves with this otherwise implausible thing we call life. Everyone gets to take home something for their work, even if they don't understand their end user, even if they are just a cog in the machine. But the musician is treated like the celebrity is often treated - someone who chose their marginal fringe state and should respectively be compensated equally marginally and erratically, as though because the job almost demands a maverick mentality, the creator should be compensated as such - a ready target for derision when the game plan doesn't pan out - their notoriety invites ridicule as a rebuke for having demanded one's attention in the first place. But you see, the best of them are probes - Martian rovers searching for answers. Hardly justification for tabloid stalking and public character assassination.
It is still a wild frontier, the music and film industries. Still being run like banks and gangsters facing off over a pile of burned out wagons. I propose and foresee a solution that requires not a change of retailer, but a change of perception.
These are sketches on a pad, and I invite your thoughts.
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