This is a good summary of what is happening in the music industry. I've always assumed that live performances were a promotional scheme to sell more albums, but I guess I was wrong (it was the opposite).
What is interesting about this is that, because of MP3, music became a form of digital art, and so it shares the same difficulty that digital art faces in terms of making money. Now musicians have to think about how they can make money from what they do, as if music was a form of New Media.
Many relatively famous New Media artists still have to supplement their income through their second jobs or teaching gigs, whereas many rather unknown painters and sculptors are comfortably making 6 figures. The medium, or the means of distribution, seems to have large influence on how much money you can make from it. This has always been true in history to some degree, but with the birth of computers and the Internet, it appears to be getting more pronounced (or is it just me who feel this way?). I think writers too face similar problems, even though at the moment, most people still prefer physical books over computer screens when it comes to reading long texts. It's just a matter of time that movies will face the same fate that music has.
Money appears to be in the markets where physical objects are required or desired, or in the markets where real-time human interaction is required or desired. In all other markets, money seems to be dissipating into the air we breathe.