The vast majority of artists never made a significant proportion of their income from recorded music, due to the extremely shady accounting practices used by the industry to deprive artists of royalties. For detail on this, see Steve Albini's notorious essay The Problem With Music.
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The internet has hugely undermined the value of recorded music, but it has greatly increased the marketability of live music, which is and always has been the most reliable source of income for musicians. If you've got a mailing list with a few thousand people who'll pay to see you perform, you've got a career. You don't need a record contract, you don't need a booking agent, you don't need radio airplay, you just need 40 or 50 towns with enough fans to sell out a small venue.
Prior to the internet, building that mailing list almost always involved a record deal, because there was no other way to reach the public; a few independent artists made it through 'zines and word-of-mouth and tenacious effort, but most didn't. If you didn't get on a radio playlist, nobody got to hear your music and nobody came to your shows. Today, the equation is completely different. There are a thousand different niche acts with absolutely no recognition among the general public, who nonetheless make a respectable living from touring because they can connect directly with fans.