Brian,
Interesting topic and I'm sure it will be a constantly evolving one and rapidly changing as is the "nature" of things on the web.

Digital Downloads:
I agree that in the last 12 - 18 months there's been a huge trend to make digital downloading available at the "fingertips" of any musician. The trend started about December of 2005 and has accelerated since then. Several services jumped on the bandwagon (within weeks of each other) including Broadjam and SoundClick. I've been a member with HostBaby since Spring of 2006, and they've been mentioning about offering a PayPal interface for us (artists) to sell digital downloads right from our own Hostbaby site, so that may still be coming, hopefully soon.

With the recent announcement of EMI working with iTunes and also Amazon to offer DRM-Free song downloads, that's another thing that will propel the music industry deeper into the digital era.

Self Promotion Sites:
There are many ways for artists to get virtually free promotion around the net, now more than ever. Two hot trends that popped up in the last year are PureVolume (250,000+ artists) and Last.fm which was just bought for $280 Million by CBS, is totally DRM-Free / MP3 oriented, and FREE for artists and indie labels to use. Recently IODA (Independent Online Digital Alliance) signed a deal with Last.fm to get all their indie labels into their system which has over 15 million registered listeners worldwide in over 100+ countries, so that's another big step forward for the indie community.

Online Licensing:
Besides ticket sales and digital downloads, music licensing will probably create the biggest sales revenue gains (opportunities) for indie artists, labels and publishers, today and in the years to come. Below is a handy reference list of online services in order of current (March, 2007) traffic ranking popularity:

soundclick.com (Provides basic, simple online licensing and recently added a song/genre/artist searchable database)
cdbaby.com (Works with PumpAudio.com, see below)
royaltyfreemusic.com (Online independent stock music site)
audiosparx.com (Online licensing, currently has 928 indie publishers & labels)
magnatune.com (Online licensing, currently features 248 indie artists)
indie911.com (Provides licensing services to 100's of indie artists)
shockwave-sound.com (European based private label licensor)
freeplaymusic.com (U.S. based stock music site)
soundrangers.com
productiontrax.com (Stock & custom track licensing)
audiolicense.com
pumpaudio.com (Online licnesing, works directly with artists or through CD Baby)
beatpick.com (UK based "clone" of Magnatune business & licensing model)
iamusic.com (Instant Access Music - US based early online licensing adaptor)
songcatalog.com (JPF endorsed ad licensing service)
ricall.com (UK based licensing service catering to major and now also indie labels.)
licensemusic.com (Pioneer online licensing service originally founded by Gerd Leonhard, author of "Future Of Music")
rumblefish.com (U.S. based private label licensing service featuring over 400+ indie artists and small size publishers)
davenportmusic.com
dayfornight.com
nonstopmusic.com
tvmusic.com

In general most of these services offer a 50% share of licensing revenues with the content providers. So services like AudioSparx, Magnatune and PumpAudio (and the rest) all offer about the same sales split (pay out) but under slightly various terms. For example, Magnatune pays out every 6 months, AudioSparx pays out every 3 months and perhaps some pay out monthly or whenever the pay out reaches a certain threshold, such as $20.00, etc.

New Licensing Service Emerging:
Then there's a new company just starting, YouLicense.com, which will charge only 9% of licensing sales, but artists will pay anywhere from $3 to $10 per month depending on how many songs they want to upload to the YouLicense server. This will be competitive with SongCatalog which charges about $20 per month (for the first year) and takes a 25% commission cut on licensing sales. I think in the 2nd year they charge less, like about $10.00 per month for the most basic account which is limited to 10 songs.

From Personal Experience:
Personally I've seen a lot of growth and increased sales in the last 6 months through Audiosparx, and I get paid regularly every 3 months, so no complaints about that. Their customer support is very responsive and earlier this year they started a "Stock Music Site" to supplement and expand their Licensing offerings and make them more competitive with places like royaltyfreemusic.com.

AudioSparx now offers "batch" (bulk) track uploading and settings and recently allowed me to link out to my own website where customers can watch one of my videos; so they're doing some cool things for independent artists, publishers and labels.

In Conclusion:
It appears that music LICENSING will play one of the biggest rolls in helping music publishers, artists, producers and labels attain growth and sustainable sales revenues. More than ever there's so many ways that music can be integrated and be "part of" people's personal, social and business lives that more & more kinds of music licenses (usage types) need to be created to cover all the new applications.

For example, in the last 12 months I was able to sell 20 licenses (including 2 direct licensing deals) that covered at least 8 different kinds of unique uses. This is a mind boggling trend which most indie artists wouldn't have dreamed of even just a few years ago; but this is where everything is heading now!

I hope this gives you a bit of "ammo" to work with for your upcoming music industry article.

Best regards,
Michael

There's nothing remarkable about it. All one has to do is hit the right keys at the right time and the instrument plays itself. -- Johann Sebastian Bach

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