I personally would be willing to pay - say $.25 or $.50 per song to download them from a music-industry-endorsed server.
The music industry attempts to stifle any company or idividual who allows for distribution of their works. I personally use Kazza(Lite), and yes I have downloaded songs i do not own (legally). However, if they had worked WITH Napster instead of more or less killed them, there are many MANY people just like me who would pay per song or perhaps a monthly charge to download songs and own them legally.
I just got an mp3 CD Player for my car and I love it. I can put 140+ songs on a single CD and have hours of music on each CD. mp3's are easy to download and work with, have great quality, and as i mentioned before, are of a manageable file size.
Music industry kazaa/napster-type servers would be a relatively inexpensive method to distribute music. Instead of physically shipping products, they could instead send them over the internet. This would require a few servers with large amounts of storage, some decent bandwidth, and a few support techs. Last i remember, there was an average of 1-4 million users on Kazaa, and assuming that even a small percentage of those users are like me, that should cover those costs quickly. If 250,000 people download 10 songs at $.25 per song, that's $625000. $625,000 should cover a very impressive internet connection for at least a few months, and if more people sign up and download more songs, then they will pull in even more money.
Keep in mind that with online distribution, there would be less cost in retail distribution and the actual cost of pressing the CD's. (And since when did a blank CD, the case, the inserts, the time it takes to make the CD, production, etc etc etc, cost $19.99? If it cost more than $5 per CD to find the band to making the CD (i.e. from start to finish), i'd be amazed.) Plus, why should people be forced to spend $20 per CD when they like only one or 2 songs on that CD (perhaps not available as a $6 single)...?
Music companies keep crying about losing money, yet online distribution could be a cost-effective method of distribution. This article was more aimed at books, but since I tend to have hard copies of books and know more about online music distribution, i ended up commenting all about music.
sorry if all this was said before - i couldn't read all the comments. great article btw :) (I'm not saying that anyone should pirate music/videos/text/software/etc, but that the (music) industry indeed should embrace the internet as a new distribution method)