One solution is to limit the role of the music industry and somehow empower bands to have their music recorded and their recordings published. Sellaband.com has a solution to bridge the funding gap: crowdsource the funds from the fans. The way it works is that the band signs up for free, creates a profile, raises $50 000 by selling 5 000 "shares" for $10 each from their fans and then they head off to the studio to record the album. Each of the fans who contributed to the album will receive a special edition CD. The music will then be available for a free download (interesting idea) on the Sellaband.com site. The band will be able to promote their music themselves, on the Sellaband.com site and through Sellaband.com’s partners and will be able to share their profits from their music sales with their fans (known as Believers).
Of course this gives the bands more control over their music and more control over how their music is made available to their fans and that makes a huge difference in many ways. Of course the trade off is that bands don’t have the benefit of the marketing dollars the music industry has (although you don’t automatically qualify for those funds, you have to be deemed worthy of receiving that sort of investment).