The documentary "Good Copy, Bad Copy" (a must-watch, by the way) has a segment on the Brazilian phenomenon called "Tecno Brega". You can watch it here: http://www.youtube.com/watch?v=xo2sv3jjJi8
Basically, the musicians give out free CDs of their music, and make money on live concerts. They treat the free music as advertising.
This is true, if you look at it: the experience of listening to a live music concert is totally different from that of listening to it on a pair of cans. The social aspect of sharing a live event has a lot of value on its own; if the musicians can monetize it well, it's a good revenue stream. There's no reason why the 100-year old technique of "frozen music" be the only way to earn a living.
That example you chose was a bit meta (perhaps intentionally so). I watched "Good Copy, Bad Copy" (which was fantastic by the way) and Tecno Brega is typically created by mashing up several popular songs into one. So yes, the artists are using the free CDs to advertise their IP, but their IP is derivative of IP from other artists.
I personally don't find fault in this, but it sort of weakens the argument that artists should give away their music by choice and make it up in concert sales when the music in question is composed of unlicensed tracks for which the original authors won't make a dime, regardless of the medium.
I don't like what's happening with IP -- meaning the draconian "enforcement" including especially ever-expanding ownership timeframes. But when I see this argument, I can't help thinking, "Not everyone is an extrovert." I think that goes for both listeners (viewers, etc.) and musicians.
I'm not trying to make a big counter-argument. Just this point.
I see your argument and think it's important. However, I think it's probably also true that the existing and historical models for rewarding musical talent exclude some people. The question then becomes, which models are better overall and less exclusive.
On the whole I'm not convinced that there is much value in retaining the horribly exploitive traditional model of the mega-powerful recording studio.
No, I'm not arguing for the corrupt "record company" model. A model that, actually, appears to me to be propelled in good part by psychopathic (in the clinical sense), type A and often extroverted personalities.
I just don't want to see such ideas become another form of discrimination against introverts. In many fields, introverts end up being placed at some disadvantage by extroverts who argue that they should simply "suck it up" and "put themselves out there".
Ultimately, I guess it's "survival of the fittest". In my perspective, however, too much of such attitude makes for an unhealthy society. (At which point, we have to get pissed enough to (meet and organize on Facebook, and) rise up and kill all the lawyers, etc., etc. ;-)
I have thought for a while that some take on the Mixergy model would be an excellent way to distribute music.
If you don't know, about a year ago (?), Andrew Warner initiated a system wherein new interviews would always be free, but you would have to pay for archival content. This seems to be working for Mixergy, but I submit that it could be even better for a record label - it promotes long-term development of artists, using their work as its own promotional material, and adds incentives to maintain a working relationship. It also rewards fans the fans that are most likely to evangelize.
Slightly OT, but if you liked American Gods, might I also suggest "Good Omens", a book he wrote with Terry Pratchett. Easily one of the funniest books I've read, and a brilliant storyline.
[Coincidentally, I read a downloaded version of this, and have since bought about 10 copies and gifted to people.]
I usually don't like to cite any popular tech books, but there is a great chapter in "Free" by Chris Anderson on examples where piracy is being monetized in China, Brazel, etc.
"No big studio picked up the film [Ink] for theatrical and home distribution. Double Edge Films pitched the movie directly to independent cinemas and to the DVD, Blu-ray and online distribution by themselves. After the release it became the most downloaded movies in file sharing torrent sites more accurately 400,000 times in a single week and exposed the film to a large audience, leading to higher DVD and Blu-ray sales in return. The independent filmmakers wrote in their newsletter that they had "embraced the piracy" and are "happy Ink is getting unprecedented exposure." : http://www.imdb.com/title/tt1071804/trivia
Basically, the musicians give out free CDs of their music, and make money on live concerts. They treat the free music as advertising.
This is true, if you look at it: the experience of listening to a live music concert is totally different from that of listening to it on a pair of cans. The social aspect of sharing a live event has a lot of value on its own; if the musicians can monetize it well, it's a good revenue stream. There's no reason why the 100-year old technique of "frozen music" be the only way to earn a living.