Ok, so when a musician puts their music up for download through "the system" (I'm not going to give this thing a name until it deserves one), there are some legal issues that will need to be addressed. I'm not a lawyer, but there are some fundamental issues I know will need to be addressed
The first is of music rights. I don't want to require the artists to release their music under creative commons, because they might want to pull the music off the system at some point. Perhaps there is a part of creative commons that could be used. That will take more research.
I would like for the system to be a good platforms for those musicians that want to get signed to a traditional label at some point. Since this is a grass-roots campaign, it will be important to not try and lock artists in like the major labels do. Perhaps when the system is big enough to guarantee revenues to artists we could require some kind of non-commercial creative license, but until then we would need to leave room in the licensing for artists to take their music elsewhere, and not limit or put the rights of the system users at risk.
The artists will need to grant users of the system access to all the music made available on the system for non-commercial use (or maybe commercial use as well... would make for a good DJ resource). My concern is that in the future if the artists want to pull their music from the system to sell it to a label, that would leave the existing users at risk for lawsuits... unless the wording included use of, but not sharing of music that has been pulled off the system. It may be enough to track what music has been pulled, and make the users of the system aware that they still have a license to use that music, but are putting themselves at risk for lawsuits if they share the music outside of the system.
I think a goal of the system should be to allow the artists to retain as many rights to their music as possible. Some will need to be given to the users obviously, but the system shouldn't need rights to the music to make money. Since the systems revenue is not driven off of distribution, there is no need to own the copyright of the music.