$800/min
At this rate you would have to create just 5 minutes of music every month to receive a gross monthly revenue of $4000. I know that there are associated production costs, but let's suppose that's purely digital music (I'd expect more than $800/min for studio recording anyway), so in the case of digital music the cost must be low I suppose and most of that revenu would be yours.
As for the time required, for 5 minutes,I'd expect an intense week of work by a seasoned musician. That sounds reasonable to me.
If the 5 minutes are divided (let's say into 3 songs), that should still leaves some idle time.
While $800/min is acceptable if the indie dev has funding (like a kickstarter), most indies can't afford that. So what's a good price?
In my own estimation I think that $100/minutes seems like a fair entry indie rate for both parties.
Now I have seen many musicians offering $50/minutes (and sometimes much less) which is lower than my estimated "fair rate", but I can understand their logic. Because at $50/minutes it becomes almost an "impulse price". At this price it's difficult to justify NOT PAYING for a few minutes of music to kick your game prototype off the ground. Even if you have a low/no income, you can justify a couple hundred dollars of game music if you are serious about being a develloper.
As for copyright, I know that giving copyrights is a big thing, but devs need all the rights to protect their games. It would be unacceptable to ship a game on which you have licensing insecurities.
That said I would be perfectly fine with leaving the composer the option to sell the song by himself as a music album, for example in a compilation, as long as the name of the game is mentioned. That sounds like a good compromise IMO. They could also negociate a small percentage on the sales of the game, why not.
I have also seen musicians selling non-exclusive music at cheap rates and I think that this is also a good way to start earning money as a musician. I don't know how well this really works but I have heard that some of these guys do ship a lot of non-exclusive music for small games, cinematics (a cinematic should not require original music) or even TV/video production,etc...
I know that the prices I'm suggesting are not guaranteeing a living, and are far from what some profeszsional musicians are charging, but everybody is in the same sinking boat here and most indie games can't feed their devellopers.
As a dev, I'd prefer to pay a musician than to use free music, but the price should be affordable.
If every dev starts using some music in their game, maybe the industry will take off and solidify.