Moving towards music distributors being required, as part of the licence, to divert a portion of revenues to matching patronage to artists would be an alternative. That way, person A, who would have supported one project for $100 000 can now support two, with $50 000 each of matching funds (assuming 1:1 matching) making up the other half. The distributors could also dis-intermediate the patrons, the difference between this model and the labels being that the artist would have the freedom to distribute their music for free as well.
Note that an un-intended consequence of this would be music losing mass appeal and catering to the tastes of the patron minority. Given the state of popular music I'm not sure if this would be a terrible loss :P.
My argument is there aren't enough dollars seeking that experience today as there are consumption dollars (which the industry has gotten used to). In the past, monetising that long tail of demand was prohibitive. Today it is not. As a single example, I would never contribute to support a musician yet my lifetime worth to the music industry is at least tens of thousands of dollars (including concert tickets).
There is enough money in that delta to fund the artists, lobby legislators, and enforce the status quo. That's the problem. If you aren't re-routing that demand you're proposing a nice but idealistic hypothetical.