John Gruber cites a BBC interview with Mick Jagger:
But I have a take on that — people only made money out of records for a very, very small time. When The Rolling Stones started out, we didn’t make any money out of records because record companies wouldn’t pay you! They didn’t pay anyone!
Then, there was a small period from 1970 to 1997, where people did get paid, and they got paid very handsomely and everyone made money. But now that period has gone.
So if you look at the history of recorded music from 1900 to now, there was a 25 year period where artists did very well, but the rest of the time they didn’t.
That date in the late 90's coincides rather precisely with the mass introduction of cheap digital recording equipment and media as well as the widespread use of portable digital players. The old model of radio advertising paying royalties for recorded music which were licensed cheaply for broadcast with the idea that randomly-heard broadcasts of songs were advertisements for the purchase of albums — which allowed the listener to select particular songs on their own — pretty much collapsed at that point in time. The technological innovations leading to ever-cheaper and ever-more accurate recording and storage capacity were inevitable but the whole thing gets ugly when one considers that the firms selling the new recording technologies were, in many cases, also publishers of the music that was inevitably going to be recorded.
And so the grand experiment in the commodification of music more or less collapsed. While it may become possible to design some mechanisms for mass surveillance of online music consumption and to find some way of collecting fees, it seems highly unlikely that this is going to be done in any way that gets meaningful remuneration for anyone but the most popular musicians and the largest publishers, as even the most lucrative models are in terms of very small fractions of a cent for a single usage. Although recordings and webcasts may have some advertising function, in the end, the grand experiment may leave us back where we started, with live performance the most important — and in many cases, only — opportunity for a musician to earn money.