Great post. I think there’s a historical view on this too: there’s always been only a small demand for a “pure music” (music-only) experience, which is provided at a relatively high cost when it’s sold (and not given away as a public service). Classical music concerts are a good example of this.

People who are into the pure music experience with recorded music also spend a lot on it–both through purchasing good recordings in the best formats available, and also through purchasing hi-fi playback systems.

But, then there’s most other music experiences: these are paired with other public or commercial services. And, people expect to pay for those services–the music comes with the service “for free” in some sense, but the service is paid for.

So, allowing / featuring advertising is one way to cover service costs and make profit. But, there are other services that work with music, e.g., a restaurant that’s successful for serving good food and playing cool music probably doesn’t need to allow outside advertising on its premises.

IMHO, musicians who want to be savvy about making money with their music need to understand in what places they (can) fit into the pure music vs paired music spectrum. There are actually a bunch of different music businesses that have little or nothing to do with the record business. I think in the long run, record sales will be seen as another one of the many attributes of these musical businesses, rather than much of a business in itself.