I share your belief that ad-sponsored content is likely to be the way for musicians in the aggregate to make the most from web music.

I don’t believe, though, that it’s an either/or situation. I notice a growing niche of artists who seek to exploit each of the available outlets–limited release “premium” CDs, paid digital downloads, and licensing. I believe that
in the long run, we’ll see netlabels utilize artists as the “attractor” to side-of-page advertising, with revenue sharing with the artists built into the deal.

As someone whose listening tastes run something like 80/20 free-netlabel v. commercial these days,I believe that a vibrant niche music culture will be built on free downloads. I don’t have any problem with the idea that a “free but premium” download “label” could arise which charges nothing to the mp3 consumer, but which
sells advertising and cuts the artist in on x percent of the royalty.

The key to this being a workable model, to me, is that enough “buzz” would have to arise that the artist is in some artistic/popular way perceived as “premium” that site traffic generates a revenue stream worth the trouble.
This, in turn, requires the right sort of website builder, with the right sort of integrity. This is so obvious, inexpensive, and do-able that I believe it is inevitable. The thing that is not clear to me is if this is “the” solution to the monetization of small-label web-music, or merely one niche.

I don’t make commercial music, in any sense of the word, and I’m all in favor of sharing music outside those make-a-buck contructs. Yet I’m delighted with the idea of an ad-sponsored label, as an alternative way to get consumers what they want and still find an income stream for the artist.

Just as netlabel owners are artists who understand the beauty of sharing culture, I suspect that the ad-based label will be an artist-owned label by someone who is not only gifted (and “commercial” in the sense of attracting a broad base of listeners) but also
business-savvy.

I believe that the new philosopher-king will be a musician with web skills who has the business savvy to treat fellow musicians fairly in an ad-based revenue stream split.