iTunes doesn't work for me for discovery. The killer feature for me in Spotify is that I can give anything a listen with no effort and no marginal cost. I subscribe to various third party play lists, so I get suggestions pushed to me. If I like something, then there's a tangent for me to go off and explore. Also, although a much smaller concern, is multi-device asset management. Having to copy stuff around is annoying, which means I don't do it, which means the collections on my work and private computers and my mobile are constantly out of sync.

But where I think you're mistaken is in that the business model conceptually doesn't work for makers of music. If I'm anything to go by (and anecdotally I am), Spotify facilitates a lot of new revenue to enter the system. The concrete distribution of that revenue currently doesn't favour indies, but there's nothing inherent about the business model that says that couldn't change.

Perhaps tier the payment per stream: Random access gets low (radio-like) payment, repeated access get higher and higher payment until $1 (iTunes price) is hit, then little to nothing after that. My listening patterns would certainly make such a model sustainable.

Is it really true that a sustainable distribution model needs to work for all of these stakeholders? Sustainable doesn't necessarily mean that it puts food on everybody's table, but instead, that it just exists, and that the participants (musicians and users) reach mutual agreement through their activities/participation.

Wouldn't musicians continue to produce and distribute music even if they weren't able to monetize it through sales? Sure, its great to reward musicians for their work, and they'd love to sell CD's and digital downloads, but being a practicing musician seems to be one of those things that musicians are driven to do, regardless of whether there is a paycheck associated with it. If music sales disappeared tomorrow, my guess is that musicians would continue to produce quality music and find an audience.

If Spotify isn't "working" for makers of music, then either Spotify will fail, the expectations of "makers of music" will change to match the reality of Spotify.