Awesome, copyfighting punk diva Amanda Palmer put her latest indy EP (the magically titled Amanda Palmer Performs the Popular Hits of Radiohead on Her Magical Ukulele) up for sale direct to her fans, along with a wide collection of limited edition merch.
Three minutes later, she had sold $15,000 worth of music and objects containing or celebrating music (vinyl records, various deluxe packages). As of this writing, practically everything else has sold out.
This model doesn't work for everyone. But it's worked for Palmer and various others, repeatedly. Just as not every artist can succeed in the studio, or can succeed touring, or can succeed performing covers, or can succeed performing original materials, not every artist can do this.
But the fact is that every commercially successful artist is basically a fluke. Most artists -- even those who've attained "success" in the form of a deal with a major publisher/label/etc -- do not find commercial independence there, and it has always been thus. As someone who helps support his family with his arts-related income, I'm here to tell you, if your kids want to pursue the arts, they should have some other marketable skill to fall back on (or chances are they'll fall back on you!).
And yet, what Palmer is doing is fascinating, because it involves spending less capital to reach smaller, more specialized audiences who willingly part with larger sums, from which Palmer gets to keep the lion's share. That looks a lot less like the old winner-takes-all model in which you get 100 or so acts who can fill a stadium and get rich, and a bunch of also-rans living on bread and water. In Amanda's model, individual artists gross much smaller amounts, but net much larger amounts, because they're not supporting a whole supply chain of execs, marketing people, giant buildings, trucks full of vinyl, radio DJs, etc.
What's more, she's made this work repeatedly, and there's every indication that it will work for her again.
Now, if your plan is to do what Amanda is doing in order to keep yourself in room and board, you will probably fail. But that's nothing new: practically everyone who set out to earn a living the old record-label way also failed (failed to get a deal, or, with a deal, failed to earn a living from it). The important thing here is that this can work, and work at least as well as the old system -- without demanding that the entire internet be surveilled, without making war on fans, without buying corrupt laws, or turning artists into sharecroppers.
That's a fine thing indeed.