There’s so much discussion in this post on BoingBoing that it’s hard to find the golden nugget. Here’s the most important concept I saw floated:
I don’t think the answer to this problem can come from inside the industry. I think it has to come from the outside — from the customers’ side. That’s the angle we’re taking with ProjectVRM, in particular with PayChoice, currently described as a buy-side system “by which readers, listeners and viewers can quickly and easily pay for the goods they use – on their own terms, and not just those of suppliers’ arcane systems.”
It’s long, but seriously, go read it.
Eat Sleep Publish is a Seattle-based blog that explores the difficulties and opportunities currently facing the publishing industry. 
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It reminds me of the coffee shop owner who allows his customers to pay the amount they choose (video here: http://bit.ly/4oXIc5). One of my readers drew the parallel that Radiohead started this in the music business when they released “In Rainbows” and found the effective price to be fairly the same as the previous model.
My head’s in a whirl trying to figure this all out. This is also a great read by Steven Johnson http://bit.ly/pWgj4
rikin – that’s a really interesting concept: is the volunteer payout directly to the artist usually the same as the royalties previously awarded? Seems like a Gladwell book topic…