Just a base idea. Would that work? (Try to stay out of 'Yes, but...' ;-))
No, I don't think that would work
There is already enough free (fantastic) music by lots of amazing artists out there - more than you would ever need in a lifetime
However, it is the labels (marketeers with the £££ behind them) that take something great but the difference is they make it "desirable"
This obviously applies mostly to mainstream pop but the principle is the same for all genres of music - and all products actually
Having a fantastic "product" (song, artist, burger, chocolate bar, car etc.) is only the first step
Making it desirable to either "the masses" or "niche markets" is a whole other set of skills and this is where the labels / marketing departments show their worth
I actually have a lot of respect for the labels - and for all the stories of success where the label is seen to be "milking" the stars - and the stars complain about labels - there are a gazillion other stories where the labels have lost out on acts that haven't made it
It is a shame labels are becoming more "risk averse" in the current "digital revolution" of the music industry and I do think there is room for a model for emerging acts
However, IMHO this model would still need a lot of marketing/business support to have any chance of success
Something more along the lines of "Not On The Highstreet" would be interesting where an overarching company brings lots of cottage industries together
BUT
What if one of the acts became successful and made millions
Presumably they would want to break away on their own, which isn't fair to the original company that promoted them (Ie the "Not on the Highstreet" company)
So presumably there would need to be a contract in place to protect both parties...
...which is back to the Record Label model isn't it?