Let's take a short walk through some relatively recent history.
In the 1950s, even in the early 1960s, it was possible for a group of musicians to record a song on a quarter-inch width seven inch per second reel to reel tape deck in someone's garage, and have it be a hit record airing on radio stations all over the country. Almost anyone could make a record, and there were a lot of "one hit wonders" who proved it. Sales of such a hit record could make the artist modestly wealthy; sales of several such records could make him a star. However, through this decade audio and recording technology was advancing, and by the late 60s the quality of the record had become a factor in its success. By the late 70s studio time had jumped from the twenty-five dollars an hour (or twenty-five dollars to have the studio from 6 at night to 4 in the morning, immortalized by a Chicago hit) to over a hundred thousand dollars an hour for the top recording studios the record companies preferred. Meanwhile, concert tickets were relatively cheap, and concert effects--pyrotechnics, laser light shows, sound and lighting systems--were very expensive. Bands lost money doing concert tours, because they made money selling millions of copies of their albums; tours were named for the albums, so fans would know what record to buy.
Then the 80s started winding down, and there was a shift. No one wanted to be out-of-pocket for expensive concert tours. Cassettes had risen through the decades, and these were very easy to copy; CDs followed, which were even easier, with a lot less quality loss. There had always been people who would steal songs rather than buy them--in radio, we tried to spot "tapers", people who would request a song they wanted not because they wanted us to play it but because they wanted to record it for their collection and not spend the money on the record. Radio stations get free records so that listeners will hear them and go buy them, not so that people can steal them off the air, and DJs then made a point of talking over intros and outros in part so that tapers couldn't pirate clean copies. Record sales began slipping, because people could copy their friends' copies and save the ever higher price of the disk.
It made a change in the industry. At one time, artists lost money on concert tours so they could make money selling recordings. By the mid nineties concert ticket prices had skyrocketed (on the Three Dog Night live album the artists joke about the expensive seats in the front costing seven dollars fifty cents; major concert tickets under fifty dollars gradually became rare in the extreme). Now artists lost money selling albums to promote concert tours to make the money. Where once record companies financed albums (the way studios do movies), now some companies expect the artist to pay for the album. Artists have little return from the records, only from the concerts.
Complicating it, recording equipment has been microminiaturized. It is now possible for someone to record a concert on a cellphone and upload it to the Internet before leaving the concert hall. Any interest the artist has in making money from recordings of his work is virtually unenforceable. He might have a legal copyright at the moment of the performance, but he cannot possibly prevent his work from being copied by millions, if millions want it.
All of this raises questions about copyright in the modern era. What has happened to music is happening to movies, television, photographs, and soon books. We might maintain the law that says an author, artist, musician, or publisher has a protected interest copying his own work, but can we enforce such a law--and is it necessarily the case that we want to do so?
To the latter, the answer might be yes. In the long term, authors and artists are vulnerable. If I sell a hundred thousand copies of a book, I probably make a decent living; but if there are a hundred thousand copies of my book in circulation because I sold a hundred and everyone copied it from someone else, I will not be able to afford to write another book. Artists are on some level accustomed to that. J. K. Rowling reportedly received four thousand pounds for the rights to release the first printing of the first of the Harry Potter books--somewhere between six and nine thousand dollars for the labor of several years. All artists live with the hope that their next work is going to be the one that breaks through and starts bringing real money--Steven King struggled financially until his first movie deal. Yet if those books can be copied that cheaply and circulated without compensation to the author, there will be no more breakthroughs, and people who might have written truly excellent books you would have enjoyed will have to do something else. It will take longer to reach movies, perhaps, because of the value of the theatrical experience; and musicians might be able for a time to make money on expensive concerts promoted by popular albums. But the theft of artistic property weakens the structures designed to make such property possible, and may ultimately reduce the number of people trying to produce it.
Artists and authors and musicians are experimenting with other ways to fund such efforts. It remains to be seen where these will lead.