Virgil from IndieHQ had a Simmilar idea some time ago : create a record label with 1,000 investors (and equal participants), where each investor had to put $100 in. This idea (raising the money that could release two CD's on SellABand) is quite better, specially if you take into consideration that every "shareholder" would have an equal vote to someone else, and so it would really be an "Open Label". There are several issues to be considered tho, and if you read the comments made on his idea (same link) you'll see that there are a lot of concerns on how to please everyone, how to do the voting scheme, how to rely on other's works (and how to distribute work) and so on...
...which reminded me Open Source and how things just work in the Open Source world. As a matter of fact, this didn't came to me as "this reminds me of Open Source" but in a radical point of view: "this would only work in an Open Source like model".
Let me explain, giving the example of Debian. First of all, Debian does not have a fixed number of "contributors" or "staff" - it's a hive mind, a colective management, where you don't really have to rely on anyone specificly but in the community as a whole. See, you can be an excellent hacker and give lot's of coding hours to developing Debian, and yet do not care (or not have the profile) to do management stuff, deal with conflicts, take resolutions or doing every other thing needed to make things happen. Thus, Debian has an organizatinal structure , elected, that simply lets people contribute as much as they want to, in the issues they prefer to.
And yet another thing: in Debian you don't need a fixed number of people, like in Virgil's idea. You can explore more this issue if you compare this idea to one other project, but this time to make a movie. A Swarm of Angels  is a project to make a movie release happen. A director, several "business angels" and several phases will be used to create a movie from scratch, where those "angels" will make a part of all the process: from writting and choosing the plot or the wardrobe, to choosing (or creating) its soundtrack, everything is decided by the community. You didn't need a fixed number of people to start: as a matter of fact you have a limit number of people who can participate: taking core decisions with lots of people was avoided this way. The first phase was open for 100 people (£2,500), and the second for 1000 people (£25,000). When the tasks are complete for this phase, and since more money will be needed, the next phase starts and "buying a stake" is again possible, until there are 5000 people.
But the big question here remains: what's the really good way of doing this? How to create the "Record Label 2.0"? Every one of the three concepts for music have problems (SellABand, Launch A Label and the $100 label), and while ideas can and should be taken from stuff like Open Source or examples like Swarm of Angels, there's still no idea of how to create the "killer record label", that which is fair to everyone (from the artist to the public). I wrote my ideas of how to create the perfect record label  in the past, even if it was just a collection of loose thoughts in a way that seemed to make sense. There's no answer yet, but it's definitively something interesting enough to make me think.
 - http://www.launchalabel.com/
 - http://www.sellaband.com
 - http://tinyurl.com/yvhzvs
 - http://www.us.debian.org/intro/organization
 - http://aswarmofangels.com/
 - http://tinyurl.com/38a28v