Assume that the internet has music in a mess. What can be done about it?
Step one: identify musicians who are finding ways to thrive in the new conditions.
For example, DJs make recordings to promote their live performances. They earn a living on performances, not recordings, and so are usually at ease with gratis distribution and redistribution of their recordings.
Another example is Jonathan Coulton, who says:
I’m an artist who’s making a very good living, and maybe this will surprise people, but the largest chunk of my income is from selling mp3s (about 40%). Everything is CC licensed and a lot of it is freely available, but people still choose to buy music from me. Touring would be a bigger part of it but I keep the schedule light to spend more time with my family.
In my experience the benefits of the new landscape easily offset whatever devaluation trend is happening, at least in terms of independent artists. I compete with free and come out ahead, and I can’t imagine I’m the only one seeing this kind of result.
Step two: help these musicians grow until gains in their businesses offset losses for other musicians. For example, identify legislation which benefits singing stars at the expense of DJs and nix it.
Step three: there is no step three.
Anyway, if the internet really does have music in a mess then this process is already happening naturally.