Bob Pittman made music videos free for consumers when he found­ed MTV 27 years ago. And now he’s pretty sure music in all formats should be free. No more $15.98 CDs. No 99-cent iTunes. Instead, he says, artists should use recordings to build a brand so that they can make money on concerts and T-shirts. Sitting in his New York office, a foot-tall MTV astronaut statue behind him, he says, "Maybe get a sponsor to pay a million dollars and just give the album away."

Pittman has nailed the future of music.

It's fun to watch the flailing going on now. Producer Timbaland—this generation's Phil Spector, though less weird—has cut a deal with Verizon Wireless to produce songs to be sold exclusively through the company's cellular service. Nine Inch Nails released its latest album only on its website. And those Radiohead guys will try anything. Last October, they released their album In Rainbows on the Web—asking, essentially, for tips in return—and have made the raw tracks for one song available on iTunes so fans can mix their own versions. Any day now, I expect to find a flash drive with a Radiohead song on it inside a specially marked box of Cap'n Crunch.

On the business side, the ideas are flying. Apple is reportedly considering a subscription-based iTunes, EMI handed its digital music business to a former Google exec, and Warner Music C.E.O. Edgar Bronfman pitched a "tax" to pay for music—a proposal getting about as much traction as a return to Prohibition.

This flurry of experiments is painful but probably necessary, like a teenager's goth phase. The endgame is clear, however. Sometime in the next decade, Pittman's model will win. Artists will give away recorded music and consider it promotional, just like music videos. All of the revenue in music will be generated in other ways.

How? Through concerts, certainly. CD sales are deflating like a baseball slugger gone off steroids, but consumers pay more than ever for live music. Concert revenue hit $3.9 billion in 2007, up 8 percent from 2006. And while hip bands endlessly test funky business models, Jimmy Buffett, of all people, has it figured out. Most Buffett fans haven't bought one of his albums since they bought their first CD player. They probably wouldn't know MySpace from their sock drawer. But they flock to his concerts, donning parrot hats and partying in tailgate festivities that look like scenes from Girls Gone Wild: Menopause Edition. In 2007, Buffett played 25 dates, with an average ticket price of $136, raking in $35.6 million—up 34 percent from 2006.