I think you have a good point. Before the advent of recording, the only way to hear music was live, so lots and lots of musicians made a living: really great musicians, better-than-nothing musicians, and everything in between.
Recording increased the payoff for the really-great who became well known, and put the majority, from very good to better-than-nothing, out of work.
With the payoffs down in the sale of recordings, the best musicians can choose for themselves to pursue their income from live performances. On the other hand, with the cost of recording down, more of the “quite good” can make recordings and sell them above costs, perhaps in conjunction with live performance, and earn enough to quit their day jobs.
I remember, back in the late 1990’s, going to my daughter’s high school basketball practice and seeing cd’s scattered all over the bleachers as kids used them to play in their portable CD players. Then I noticed something startling: EVERY SINGLE ONE of them was home recorded.
That was when I started saying that *recorded* music would be the 21st century’s equivalent of the free toy in the happy meal. I think technology was a boon to musicians as, in the early 20th century, musicians were able to perform a song once and sell it to as many people who wanted to buy it. That whole paradigm morphed into the highpoint of the recorded music industry which, from my perspective, was around the time MTV came into being.
And then the same technology that allowed musicians to earn big bucks and become pop stars as well as musicians sorta did them in. It allowed people to not only make high quality copies of their stuff, but it allowed people to access original copies to copy.
In the end it sorta went full circle. Now musicians have to make money the way they used to, by performing. However, I doubt there will EVER be a sheet music business like the one before recorded music.
There is also another reason the industry imploded: Recorded music just isn’t special any more. Part of the reason is the psychology of not respecting something you get for free. But also, there is just the newness wearing off. There are not as many pop stars as there used to be and there are a LOT more one-hit-wonders. And just as people don’t dress up to fly any more (commercial airliners are just flying busses now), recorded music stars are not stars any more, unless they are made famous by something other than their music, e.g. Lady Gaga.
As a musician in various bands myself, I’m seeing another facet to this: The emergence of the “bar band” as the modern equivalent of a softball team. That is, LOTS of people are learning to play guitar, bass, drums and keys “good enough” to do the occasional $300 gig. This also makes it hard for the truly talented and skilled musicians to make any real money because the whole scene is reduced in perceived quality by the mediocre bands. And there are a LOT of ‘em.
And I think you hit the mark in your last sentence. If you really are good, you can sell CD’s at your performances. In fact, if you put the effort into making a good quality recording of your gig, you can sell copies of the recording of the actual gig at the gig itself. You won’t become a millionaire but, as you said, you could quit your day job.
But it would take REAL work. Most of the musicians I know play their instrument and will help set up and tear down, but they don’t want to spend time doing much else. The dedicated ones will have more success.