Apple Music & Spotify are using a subscription model, like you suggest.
YouTube is using advertising. So are Facebook, Google, and many web & mobile apps. Thankfully there's not been much advertising in desktop OS platforms (until Windows 10).
Some bands still sell CDs. It's a while since I saw software on an optical disc, but that could be a way to sell it.
Buskers beg for money on the streets. Wikipedia and the EFF do this, asking for donations.
Indie bands make most of their money by touring and performing live concerts. How can software be performed live? Hiring a developer to implement it in a big organisation? Paid workshops/training courses? I think that there's more opportunity for growth in this area.