Making a sea-steading country is also a good solution. If your servers live there, and can connect to everyone else, it will work.
I don't know how TPB has lasted as long as they have. It is impressive.
I do know that the side benefits of starting your own country could easily finance it. Surprisingly, this is somewhat relevant to Tipjoy if you go out on a long enough timeline.
I think of population of a new country a lot like hiring. You want only the best if you're really trying something new.
Most countries ripe for revolution probably wouldn't be stable enough for the goals. It's like Woody Allen quipped "I just don't want to belong to any club that would have someone like me for a member"
I'm not sure if you were meaning "connect" physically, but of course there's always satellites, and other non-physical ways to connect.
Realistically though, satellite internet is just too expensive bandwidth wise for it to work for the Pirate Bay.
You could dial the support up or down, maybe giving a disproportional amount to a certain band.
I think you're totally right: unlimited and immediate access to music is just better.
But that doesn't mean you shouldn't directly support the artists.
The RIAA can't compete because they are fundamentally no longer part of the exchange. They add nothing. They continue through momentum, and will die soon.
Better for users, but not for producers.
Also, Matt has made the point that the vast majority of people are unwilling to donate when they don't have to.
I'm guessing you have thought though this situation much more thoroughly, and maybe have data on it too; otherwise, I'd be very surprised if things work out so ideally.
Those eyes and ears were supposed to be looking at ads, where more impressions equals a happier advertiser. It isn't obvious how that extends to donation-ware, when everyone can just move on to the next free source of music.
My favorite band is Radiohead. I didn't pay for their most recent album, because it didn't seem worth it. But I have paid over $200 to get 3 tickets to see them in concert this summer.
A few weeks ago, Papa Johns locations in north east Ohio gave away free pizzas worth about $5. People stood outside in the 45 degree weather, with rain, for 2 hours to get that pizza.
That said, I don't think this spells doom for micropayments. A successful "donations" model is Ben & Jerry's Free Cone day - a not-insignificant fraction of people donate to help various causes. I'd be interested to see statistics on this.