Wow, Henry Rollins just weighed in on this topic. He has a column over at LA Weekly, and the latest one is "Henry's Thoughts on When It's Alright to Download Music (Yes, Even ...". He seems to advocate approach #1, too. Give it a read, it's pretty interesting.
He also drops this interesting tidbit:
On the other hand, musicians have been kept from their earnings by everyone from venue owners to managers, agents, other band members and record labels, to the point where it's an almost built-in expectation.
Here's a for-instance: You've perhaps heard of the band Black Flag. The label the band's music is on is called SST. The label is owned and operated by Greg Ginn. He doesn't pay royalties. No royalties, no statements, nothing. At least not to me and several of my old bandmates.
Whoa. Good thing Greg Ginn was never in a band with East Bay Ray; based on the whole DKs/Alternative Tentacles ugliness, I can only guess what Ray would do in a situation like this...
