So this article is largely about the changes in technology, namely that with a high barrier to entry and when distribution was predicated on moving physical products, times were good for musicians selling the media of the time (records, CDs). But this article makes the same mistake pretty much every article decrying the zero cost of distribution (ie the Internet) and the inevitable piracy, it ignores a key point: at…
As you noted, for a smaller number of top artists, record sales served as the sole source of income, and enabled them to do amazing stuff. XTC springs to mind - Andy Partridge apparently had terrible stage fright, hated touring, and basically stopped after the late 70s. During the 80s they recorded some truly groundbreaking albums on the strength of their songwriting and studio talents, and were able to survive on record sales based on a strong fan base and very limited radio airplay to promote record sales.
The KLF is another example. I worked for their record label in the early 90s, and they did absolutely no touring at that time (or ever, AFAIK). Revenue was from the sale of singles, the White Room album, special releases, and foreign licensing.