This is probably the easiest problem to solve for a DIY band, yes? The real problem must coming up with the up-front cash to pay for the studio time, production costs and other miscellany.

How about someone with good indie cred (possibly someone who is both an arbiter of taste and has good musician relationships) raises a pool of money from serious music fans. Each fan puts up a relatively small amount--say something like $150, an amount that would represent a significant chunk of that fan's anticipate new music acquisitions for a year. The Indie Cred guy then uses the money to fund various bands' recording efforts, with the expectation that the music is eventually released in a "buy our download directly" fashion. The "investors" who put up their $150 get all the downloads from funded bands at no additional cost. Perhaps an arrangement could be made where the artists give back a certain percentage (say, 10%) of download revenue to the fund, which then uses it to perpetuate the funding model. It could be sort of like a rock'n'roll VC fund.

Though the fact that I use words like "investors" and "fund" and "VC" in relation to rock'n'roll probably means I should keep my greedy little hands away from that world.

Have you seen CD Baby? That's pretty much your idea. They used to just sell physical product but now do downloads as well. I've used CD Baby a lot and they're great. Good, fast service, handle credit cards and PayPal, ship internationally and so on.

Nice idea. I think the best way to organize this would be for the pool to just own the publishing rights and handle all the money that way, paying the artist their share after the pool's costs have been deducted. I reckon they're going to need to keep a lot more than 10% though, to cover the bands that go nowhere, and all the other costs. Probably most bands would also be happy to pledge that money from their future releases would also go into the pool, so that the pool gets the benefit if they go huge.

I'm thinking the pool could also employ staff to organise concerts and arrange marketing and that kind of thing, and the artist would of course have the option of paying for this out of anticipated future earnings. And once the company gets bigger, they're going to need to hire extra staff than that one guy, to check out artists and look after their repertoires and so on.

There is a big possible snafu - what's to stop the music the pool funded popping up online for free? I figure if more than one of these pools gets going they're going to want to club together, forming an industry association to make sure no one's ripping them off.

Oh, hang on.

You can't join, cillit bang. No cynics allowed. Continue to rely on the RIAA. kthxbi.