However it was the hard core music fans, the people who presented downloading as something that the "cool kids" could and should do, who opened the door for the millions of Toms, Dicks and Harriets to take the new Mariah, Rhianna, Stereophonics etc etc. It was those mainstream fans, the ones who bought two or three cds a year, who kept the whole thing going. They paid for the investment in the marginal.
It's very hard put any kind of promotional support behind a record and break even. Artists you have heard of and probably own records by are struggling to sell 5,000 copies across Europe on new releases. Small labels now make a large % of their money from digital and selling records to their own artists to sell off stage!
Assuming you spend no more than £5k making an album then 5000 sales is not much more than a break-even proposition if those records are sold through retail channels. Spend more than £5k and you are almost certainly on a loser. Obviously there are bands who can record for buttons or make records at home but as soon as you need anything more than the basics of amateur / semi-pro recording then you need a sponsor, a grant, a trust fund or a very understanding bank manager. That's why the big hitters pull the train for the small acts and not the other way around.
I don't want a musical world where the Arts Council decide what is worthy of support. Would you trust those cosseted fuckers to define your listening? I'd trust Simon Cowell before them. Really.