I suggest that the money for art comes from the customers who want the producer to produce it, i.e. the artist’s audience.

Just because publishers have traditionally intermediated, purchasing the art from the artist in order to subsequently sell copies of it to the artist’s audience (with a monopoly on manufacture of copies), this doesn’t mean that this is the best way today.

Given that the artist’s audience are now quite capable of manufacturing and distributing their own copies, it seems obvious neither they nor the artist need the publisher’s services any more.

There’s no way of avoiding it, but one has to conclude that publishers are now redundant. They have no new business model to rescue them – unless they really can live off of the ill gotten gains from suing artists’ audiences for producing unauthorised copies. That model won’t last too long, thankfully, especially when they lobby for the legislation to be made ever more draconian (hastening copyright’s demise).

What you’re left with is a far more efficient exchange between the artist and their audience, or the journalist/blogger and their readers.

Without the services of the publisher, the producer and their customers aren’t going to stare at each other across an imagined chasm, blankly wondering what the future holds; artist worrying that the audience will no longer want to pay, and audience worrying that the artist will no longer want to produce. Naturally, they will do a deal (without 99% or even a significant chunk of the money going to the intermediating publisher or collection society).

This is the new deal (the same as the one before copyright):

• Art for money, money for art.

The market for copies has ended.

Artist: Abandon selling your art to a publisher, or selling copies to your audience. From today, you shall sell your art to your audience.

Audience: Abandon purchasing copies from a publisher, or from an artist. From today, you shall pay your artist to produce art.

Notice how the audience has assumed the role of publisher? This shouldn’t be too surprising. The commissioners of published work have always been the public.

Check out Clay Shirky for a second opinion:
Newspapers and Thinking the Unthinkable