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What they have to do, is find some way to add value to music in such a way that having a copy of a song isn't enough, similarly to what mmorpgs are to games, you can't pirate them because the real value of the game is based on an online membership.
How to do this? well, maybe its time to rethink the whole thing, its not like they don't have the people or the money to do it.
maybe it's not membership. maybe we have to break people out of the idea that they "own" the music. Right now most music lovers want to own the music (or at least feel as though they're not restricted) but largely don't believe paying for music is especially necessary.
Celestial jukebox? Five or ten bucks a month, all you can listen to anywhwre, anytime on ANY device - including mobile handsets. Music becomes a utility, it levels the playing field for artists as far as distribution goes and labels can go back to concentrating on marketing and A&R.
How do you make sure everyone gets paid properly? Well, figuring that out is part of the process. All of the governing bodies around music need to be streamlined anyway, it's ridiculous - mechanical rights, publishing, performance... this stuff needs to be updated badly... and don't get me started on copyright.