A pay-per-download engine will generate revenue in excess of its expense. A pay-per-download engine will not generate the per-album revenue that LPs did, or that CDs did. The reality of the new technology is that, as advertised, it can make things less expensive and more efficient, which can remove some of the excess profits in the system.
Commercial tie-ins are a traditional way of licensing music. For some years now, for the artist, record deals are less about the artist making real money and more about promotion and rather unfavorable terms for borrowing of funds to promote touring. The economics of downloads is that artists will not suffer any more than they already have. The economics of advertising is that freed from record company hegemony, music will license directly from artist to commercial outlet, to the benefit of all.
Even the artist who disdains commercial licensing probably wins, as that artist can now disdain as well record companies, and use the tunecore, the internet and touring to build the following that once only a major record label deal could help build. Such artists will inevitably arise–it’s just how and when and what innovations in marketing they use to make it.