i think this kind of model is doomed. trying to get the old-skule record labels involved is a recipe for failure.
i'd prefer to see a whole bunch of boutique web 2.0 record labels, making new stars out of heretofore unknown acts, using entirely new revenue models.
In one case, the start-up spent $300,000 to host a video from pop singer Alicia Keys that managers claimed would draw 1 million new users. But without any of her hit songs in the clip, only 5,000 visitors showed up.