It didn't take long after Apple added podcast subscribing to it's iTunes software before the record labels began to question how they are going to make money from it.
I was checking out Yahoo! News a few minutes ago and apparently there is a Seattle public radio station that is bringing in Indie and small record label bands to do live performances for its podcast. They have the bands sign a little contract giving the station permission to use the music for the podcast and they rock out.
Basically what this radio station did was figure out their own way to work around the recording industry. We all remember the Napster fiasco and while there are similarities, this is a different beast. Napster was just stupid. Revolutionary, but stupid. Whoever what's-his-face talked to about whether or not he was going to get his butt sued off, was a moron.
That's distribution, brotha.
Podcasting is a bit different. Sure there are some morons out there who will play some of their CD collection breaking all of the copyright rules out there, but for the most part, the podsafe music network is going to fly. Of course the proclaimed "podfather" Adam Curry is behind the music network, but he knows his stuff and he's trying to get it done right.
What really may need to happen before podcasters stop using illegal music in their podcasts is for a couple of podcasters to go down. I almost believe that is what the recording industry was doing with illegal mp3 music downloaders. They would sue the crap out of a few people in a given area and word would spread scaring the rest of us straight.
Most of the music I have heard on podcasts are from bands who are trying to make the big time. Which is good for the record labels. These little bands will go out and produce a CD or a few songs and send them out to podcasts. If they make the proper rounds and make the biggest podcasts, they'll generate buzz. Assuming it's good music of course.
They'll sell a few CDs through their website and make a little coin to really produce a good quality CD and then a record label will pick them up so they can mass produce the underground success and get a slice of the sales. Then the band will probably let a recording of their single to go out to the podcasting world so podcasters can play and plug them. Making them millionaires with the record labels getting their cut of someone else's creation.
Assuming the music is good of course.