#1: A Recommendation Service: You know how Amazon will list "People who bought this, also bought these ..."? The problem with these recommendations is that people may have bought other items, but you don't know whether they actually liked them. I envision a music recommendation service that lets people select mainstream music they like and recommends indie music they might like based on user ratings.
#2 Music Analysis: There are already software tools that can predict hit songs [1], so why not take the idea a step further. Let users select a number of songs they like and build a profile of their tastes. This would predict new music they would like before it built enough critical mass to be in the "recommended by others" section.
#3 Talent Gamification: Think you've got American Idol potential? Submit your audio clip to the service get user ratings (and possibly software analysis). Do head to head match ups, clip of the day, or some other tactic to get people's interest and keep them coming back on a regular basis.
None of this is easy, but I definitely think the potential is there for a disruptive software solution to the major record labels' stranglehold on the music industry.
[1] http://www.npr.org/templates/story/story.php?storyId=1136733...