The last decade has seen huge changes in the music industry. Most of this is due to the impact of the Internet. If you read the book that songwriter/producer Butch Walker published, you can really see how these changes have shaped the industry. He talks about how the record companies used to be able to give out absurd amounts of money to bands, which then got famous based on how well their songs did on the radio. This was before an online music player had been invented, so people really had nowhere else to turn.
However, as the Internet grew and music became available online, everything started to change. People listened to the radio far less. They stopped buying nearly as many albums, instead just picking and choosing the songs that they wanted. The industry used to make a lot of money off of tape and CD sales, and that dried up. Artists felt the brunt of the change as their own revenues fell. Record companies stopped spending so much money to promote smaller bands, instead working with known artists that were guaranteed to make money.
However, an MP3 music store did not ruin the bands; it just changed the way that they made money. For many bands, the invention of the online music player was the best thing that could have happened. Even if a record company would not sign them, they could still make and distribute music. They could find those niche fans who loved what they were doing. Instead of having a few mega-bands earning 90% of the money, there were a lot of smaller bands making a living.
These days, an MP3 music store is basically just a way for a new artist to get fans. It does bring in money, but it is more like a promotional tool. People find the songs that they like, and the artists hope that those songs bring the people to shows. The artists then make most of their money actually playing, rather than selling CDs. MP3s are a critical part of the process, but the model has changed.
Sell Your Music Or Give It Away?