There are actually two big questions here that seem fairly tied together, but practically speaking are totally separate when it comes music online.
1. How much money should consumers/advertisers
be charged for access or proximity to music?
2. How much money should artists, publishing companies,
record labels and other rightsholders be paid for
that access?
Those two definitely seem related. As a theoretical floor on #2 the rightsholders have lots of leverage and so should be able to negotiate for fair (or better than fair) payouts from #1. As a theoretical ceiling on #2 you shouldn't be able to pay out more money than you make from #1.
In reality, the actual floor on how much rightsholders get paid is only up for negotiation if the music comes as a result of interactive streaming from music provided by the rightsholders (read: Spotify). If it's internet radio, where the user doesn't choose what they hear (non-interactive, read: Pandora) the rate is set by Congress regardless of the business income or rightsholder desires. And if it's user-generated content subject to the DMCA (read: YouTube) there's no clear need to pay anything to the rightsholders (see Grooveshark). So, there are tons of arguments about #2.
As far as #1 goes, there's never been a music company that got to million-user scale and was long-term profitable, so clearly companies (and their investors) are willing to send more money out the door than they make. Fixed-rate subscriptions have a perverse property that your best users by engagement metrics are your worst users financially--they cost you the most with all that listening. Advertisement-based monetization matches consumption to revenue, which is nice, but as Pandora and Spotify will both attest, the revenue from ads thus far is way short of what they or the rightsholders would like.
So what to do? Talk about it in the press and see if you can get public outcry to force someone to pay your company more?
In fact, we already do a little bit of that through the National Endowment for the Arts, National Endowment for the Humanities, and various programs run by the Library of Congress and the Smithsonian (among others).
In the 1930s, The Works Progress Administration did a lot of interesting things with the arts. Some of it involved prettying up overpasses and federal buildings, and some of it was much more ambitious, like the Federal Music Project ( https://en.wikipedia.org/wiki/Federal_Music_Project ), which did everything from holding free concerts to recording and studying various types of traditional american music.
All Western countries do this already. But most of the subsidy money goes to non-popular "high" art - usually classical and/or academic.
But... back in the 1960s and 70s, and to a lesser extent in the 80s, access to unemployment payments in the UK were much easier than they are now. And so a lot of people used "the dole" as basic income while working on a music career.
As an informal system, it worked pretty well. The UK got a lot of tax money from of the most successful musicians, and the entire sector brought in significant international revenue.
It wouldn't work now because there's too much music being made, and too little income from most of it.
You'll still get a handful of exceptional breakout YouTube stars. But you'll get a much bigger mass of wannabes with no real prospects.
That's not necessarily bad, but it would be a first in history - instead of bread and circuses, it's going to be laptops and social media.
In reality, the actual floor on how much rightsholders get paid is only up for negotiation if the music comes as a result of interactive streaming from music provided by the rightsholders (read: Spotify). If it's internet radio, where the user doesn't choose what they hear (non-interactive, read: Pandora) the rate is set by Congress regardless of the business income or rightsholder desires. And if it's user-generated content subject to the DMCA (read: YouTube) there's no clear need to pay anything to the rightsholders (see Grooveshark). So, there are tons of arguments about #2.
As far as #1 goes, there's never been a music company that got to million-user scale and was long-term profitable, so clearly companies (and their investors) are willing to send more money out the door than they make. Fixed-rate subscriptions have a perverse property that your best users by engagement metrics are your worst users financially--they cost you the most with all that listening. Advertisement-based monetization matches consumption to revenue, which is nice, but as Pandora and Spotify will both attest, the revenue from ads thus far is way short of what they or the rightsholders would like.
So what to do? Talk about it in the press and see if you can get public outcry to force someone to pay your company more?