This is so wrong it's fully in Poe's Law territory.
Musicians at no point have made a majority of their money from album sales. To make any money off an album most bands need to sell tens of thousands of records. Most records never sell anywhere close to that number.
Record labels are basically loan companies. They sign a band on a contract for X number of albums. The royalties of those albums is then divided up among the label, the song writer(s), often the engineers and producers, and then the actual performers on the recording. A majority of the royalties are kept by the labels with the rest divided up among everyone else.
For signing this contract the artist is often given an advance. The label will also front money for studio time, recordings, and promotional work. Most of that fronted money the artist owes to the label so they start in arrears. When an album is purchased the label keeps the artist's royalties until their advance and other "recoupables" are paid back. It's only then an artist actually makes money off their album sales. The only ones that even begin to see money from album sales are ones that manage many tens of thousands of sales. Most artists never sell enough albums to pay back their advance.
Amortized over time an advance for a record for most artists is pretty paltry. In order to make a living with music they need to tour or luck out with a licensing deal.
The money for artists has always been in touring. They get a cut of ticket sales and keep their profit made off selling merch. But like with everything else it's the megastar acts that make most of the money. Many artists make barely above minimum wage on tour.
Music piracy has not really changed the calculus at all. Most musicians barely get by playing music. The megastar acts have always been exceedingly rare.