Well said Gratis. With that statement I can agree, except that it is the middleman that gets most of the money (agents and record label), not the musician.

Musicians are granted loans to record their songs, etc. Usually, loans for startup bands are around 50-100K. But the more popular they get, the bigger the loan. Some are not always able to pay off those loans (look at those "one day" artists such as McHammer), even if they appear to live in "pure wealth". Very few are able to make more than they owe. It's one reason why you see so many more independent record companies lately.

I know about this middleman situation not only from "stories", but also from experience.

There's even a website devoted to circumventing the middleman now, called MusicLink (formerly FairTunes). I don't think it will change the situation of piracy much, but it's probably something to look into: http://www.fairtunes.com or http://www.musiclink.com

As for the distribution of non-copyrighted material, I rather think in terms of copyrighted material that was specifically released on Gnutella and other mediums for the purpose of promotion. This is something I'd love to see more, and one of my main focus points with my Gnutella client. I'd like to see unsigned bands to show off their talents. kinda like a distributed version of the MP3.com website. It'll help the distribution of music that is not spoon-fed to the consumer's by radio stations that only have the option between "Yes, boss" and "No, boss" (thus do what they're being told to play).

I think that Gnutella and other P2P distribution systems will allow record companies and organizations to rethink their strategy. Consumers are given access to a lot more information using the Internet, than they ever had before. Information is always worth more than money.