It's an important question for those of us who would like to make a living from making this type of music.
You may have read about the idea of the "Long Tail". Basically it describes the demand curve for music or movies, where you have a few "blockbuster hits" that account for say, 80% of sales; and then you have all the rest of the music.
If you plot the demand on a graph, you get a big spiky curve where the "hits" form a first really tall spike, that rapidly drops off into a long, long curve that represents all the rest of the music.
Record stores carry the hits in the spike. Most people buy those, so that's what they carry.
But an online store has no problem with inventory space. They can carry LOTS of artists. The key is pointing people to the lesser-known artists who have yet to be "discovered".
Amazon does this brilliantly with books. They now make MORE money from the thousands and thousands of books that sell a few hundred copies than they do from the "blockbuster best sellers".
Amazon achieves this because of their recommendation system that points customers to other books that they might enjoy because they are similar to the blockbuster they just bought. And they have Customer Ratings for each title so you can see that other people liked these lesser-known books.
And then there is the Rhapsody music service. Did you know that out of their 1 million tracks...virtually ALL of them get played at least a few times every month? Again, Rhapsody has a recommendation ability that says, "You might like this other album if you like King Crimson, or Oasis, or whatever.
Investors are starting to talk about making money off the Long Tail.
And this means that we artists have a chance if we can make reasonably good music that at least some people will like once they hear it.
I have been researching this, and I think it will take another 3-4 years until it really gets rolling. But there is hope for we lesser known artists, I think!
This is truly an exciting prospect, both for artists and consumers - no, lovers of music.
It puts the power of choice more directly in the hands of the person deciding what music they want. This means that, with a system by which they may be introduced to new and different artists, the reasons for choosing one or another is more about quality and taste the the created-taste as dictated by the 'industry', which really has more to do with lifestyle, fashion, image, and social acceptance than the actual music itself.
Once this system has been improved, and is more accepted, it really will blow the doors open to the artists. The problem now, of course, is that the proliferation of inexpensive software and harware allowing anyone to create and distribute material has caused the market to be inundated. I don't think that this craps out the market - the cream will still rise to the top. However, it is the person looking for music that may have to wade through tons of irrelevant garbage to get to what they really want. Once a system is in place that really facilitates this experience, it is going to be an amazing thing.
I'm much more than hopeful - I think this is the future of music and I'm really excited to be a part of it!!
I hate to be pessimistic, but I can't imagine that this will amount to anything more than pocket change for most artists. Time will tell.
Assuming this gets rolling because the sites like iTunes and Rhapsody make money with it, I think any musician with something original and good will find enough regular listeners to make more than pocket change.
But that brings up another trend: the trend back to the live gig as the money maker, rather than from sales of a "packaged performance frozen in time", i.e., the CD track.