as far the local/niche artists, i should clarify i don't think they will be doing 'better' than they do today.
i am instead looking at it from a fans point of view, instead of 100 next gen justin fans, i think they will be say 40 gen justin fans, 10 next gen r&b fans, 10 next gen power ballad fans, 10 next gen lounge crooner, etc...
I dont think the amount of music listened to is going to change, the margins for the companies and artists income will probably go down... but 'quality' of music will be the same as it always was