Imagine an on-line karaoke competition.
Say a thousand people enter, they each record a song, and they each rank a half a dozen of the others'. That should be enough to select the winner, which will be well worth hearing. We have now produced and selected one song without the involvement of a recording company.
Now imagine an on-going karaoke competition; similar to the above, except instead of everything happening in lock-step - first everyone records a song, then they get collected, then the entrants rank those assigned to them - the process is continuous. Any time, someone may enter a song, or rank a few of the songs already entered, or hear the current winner. With a bit of care, that too can be done; and we are now producing and selecting a stream of songs without the involvement of a recording company.
Problems
The biggest problem would be coming up with a song that can be treated this way. The words and tunes of most of the songs people sing at karaoke are copyrighted and heavily restricted.
In the long term, this is solved easily; 
make sure that the output of the competition is free for others to reuse and improve upon, by making it available under something like the ShareAlike license.
In the short term, one would have to bootstrap the system somehow; by intentionally donating work to this system, for the benefit of posterity. It would be no small task; like FSF, one could expect to expend twenty years of hard work before the system even begins to look like succeeding.
Solutions
Searching around just now for any ShareAlike music, I came across a program called iRate, which handles all of the technical details of the voting, collating, correlating and so on. Must investigate!
⇦ clew test run | ⇨ iRATE therefore iAM |
