I have seen the future...
and it's...allofmp3 (now mp3sparks).
Seriously, if the recording industry would get their fingers out of their ears and think beyond the marketing of the latest one-hit wonders, they might realize that allofmp3 holds/held the model that might allow them to remain quasi-relevant at least for a few more years Here's the formula: Allow the consumer to choose the format and the bitrate of the digital music they purchase. Make it reflect the actual cost of production, bearing in mind that the purchaser is doing the legwork and paying for the bandwidth. Make it a purchase model, without DRM, not a rental. Give the bulk of the proceeds to the artists. If the record companies want to save face and retain the DRM , why not limit its use to allow for self-destructing samples (like the Zune apparently does after 3 listens of a shared song)?
While they're at it the RCs could harmonize their licensing worldwide and get rid of the unhappy situation where a consumer can't purchase a particular song because they happen to be sitting in the wrong country and so turns to a P2P solution. Apply this same logic to internet radio. If the technology exists to deny me access to an internet radio service because of my location, does it not also exist to target any ads and marketing to my locale and reap the revenue rewards while I enjoy the service, rather than just throwing up a wall and throwing away that potential revenue?
Finally, many of us are old-fashioned enough to prefer a physical product to have and to hold. We all know the cost to produce a CD is negligible. If I can go to a "dollar store" and buy a multitude of products which were produced halfway around the world, shipped and put on the shelf for one dollar or less, why can't the record industry get a CD into the stores and market it for say $5.00 or less? I dare say, they'd sell a few more CDs/LPs/DVDs.
Feel free to retrofit all of the above to the film industry.