The only market is in the "enthusiast audiophile flac player thing that costs way too much", just like it is currently for vinyls and DVD players.
I both have music subscriptions (Spotify for the wife, Qobuz for me: Qobuz streams lossless but sucks for music discovery) and good old files (mostly FLAC files indeed except some very old, impossible-to-find, live recordings I only have in mp3). One does not prevent the other.
Also some people self-host or partially self-host things: you stream from a server you own: be it family pictures (I'm Mich / immich), movies and/or music (Plex or Jellyfin). And, well, the stream doesn't spring out of thin air: there are good old files on the server.
Lastly: some music streaming services allows you to buy albums and/or individual songs, DRM-free.
It seems like streaming "won", which is disappointing.
Piracy was ultimately defeated or at least greatly diminished thanks to streaming services. It's making a comeback now due to increased prices and fragmentation though (and to a degree, the politics of prominent figures at these streaming companies - artists pulled their music from Spotify out of protest).