Techdirt has two articles running pertaining to how music could use the new digital paradigm to improve there sales and services.
The article on Prince and how he exploits the new media show an interesting business model:
He also seems to realize a key point in understanding the difference between music that hasn’t yet been created (which is scarce) and music that has been created (which is abundant). As such, he has done a number of deals that getting someone to pay him upfront to create music (you can get people to pay for something that’s scarce) but then giving that content away for free. In the latest case, the newspaper is paying for the album, because it’s going to help get them a lot more attention for their newspaper. This is the same thing that’s actually happening in China as well, where piracy is rampant, but there’s plenty of new music — because sponsors are willing to pay to have it created.
Robin