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For music startups, this could make music licensing even more of a mess than it already is. Imagine negotiating separately with every artist in your catalog. I know that to some extent separate negotiations already happen for the biggest artists, but further disaggregation of the rights can only make it worse.

Maybe over the next 35 years, everyone will reclaim their copyright, form a syndicate, and collectively license them on reasonable and flexible terms! I can dream, right?

There's no reason the individual artists can't sign up with ASCAP, BMI, Harry Fox, etc. (or some new similar agency) and I would expect most of them to do that (many already have, of course). The exception would be, as you say, the very biggest artists. Most small to mid-level artists aren't going to want to hassle with (or pay for) individual negotiation any more than the your music startup will.
Ever tried negotiating with a major label? If you had, I suspect you might change your tune. Furthermore, musicians are far more likely to agree to reasonable terms, as their organizations are far smaller and less byzantine than a major label.

For the record, I think this is a great idea. The major labels have been operating with a plantation mentality; now they're getting their version of the Emancipation Proclamation.