I think a lot of folks have misidentified the problem with digital music distribution; it’s not the music that has become virtually worthless in the new ‘attention economy’, but the distribution of digital music. After all, it’s the distribution of works that has become essentially free, not the production, and not the licensing.
Radio is not going away, but downloading likely will, because collectors tend to want a physical thing, a tangible representation of the music they love, to interact with and display as a status symbol. (or, at least in Bruce Willis’ case, bequeath to their children) It won’t be long before the tour T-shirt you buy at the gig can play back the concert as well as show your musical allegiance to friends and strangers, so physical distribution will likely remain viable and valuable.
Folks who aren’t so invested and listen only to environmental or ‘wallpaper’ music will be perfectly happy with ambient and streamed content, so long as it’s curated in some way, either by their social groups or by major media.
On-demand streaming serves the needs of the more adventurous ears as it’s a vastly more efficient means of music discovery than radio. I feel confident it can earn its place in the new media paradigm.