I just watched this very interesting documentary on the current state of the music business. It was much better than I expected and I encourage you to seek it out. Perhaps your local library has a copy. Or you can find it at Amazon by clicking on the link below. Some great performance footage and insightful commentary from Branford Marsalis, Erykah Badu, Eric Clapton, and many others.
While the usual villains are called out, The Telecommunications Act of 1996, Clear Channel, et al, the news is not all bad – The dis-intermediation provided by the Internet has allowed musicians to connect with fans as never before and computer based recording technology has put a recording studio that in 1980 would have cost hundreds of thousands of dollars within the reach of almost any musician. We can hope that somewhere tonight the next Bob Dylan, John Lennon, Brian Wilson or Prince is pouring his heart and soul out and getting it all down on an iBook.