The full £1 goes to the artist.

But who is going to be putting all these downloads on line? Who will pay the cost of the original recording, mixing and marketing of the album? Who pays the cost of the website upon which the album is released? Who pays the tax on each sale?

There is a whole lot more involved in production costs than just sitting a performer in front of the mic and letting them sing or play. I can see some merit in this idea - less materiel being used as there is no disc or packaging, no transport costs and no retail markup, but I think that it is naive to think that any music would get onto the system if the artiste was the only person being paid!