Just last weekend, I saw the episode of "How It's Made" on Science Channel that covered vinyl pressed records.
Here's a comparison of the processes.
Vinyl:
- Manufacture lacquered master discs (50% QC rejection rate!)
- Ship lacquered discs to recording studio
- Put master in recording machine
- Cut test groove
- Inspect with built-in microscope
- Cut lead-in
- Cut audio tracks, in 2-channel stereo
- Cut lead-out, label master by hand
- Ship back to factory
- Use chemical process to create nickel-silver negative
- Peel metal negative off lacquered disc
- Manually find center with microscope
- Center-punch and trim metal master
- Use metal master to stamp out vinyl disc copies
- Ship heavy discs to distributors
Digital:
- Press "record", press "stop"
- Upload raw audio tracks to studio file server
- Sequence and mix raw audio into master song track
- Assemble album
- Add metadata
- Re-encode master tracks to consumer quality
- Upload to distributor's server
The capital requirements for digital recording are very low now, having benefited from Moore's Law. If you can buy just one high-quality microphone and one decent laptop, and invest a whole lot of your own time, you can single-handedly produce an album with quality comparable to the best studio recordings of the vinyl era.
While Bobby McFerrin is the first person that I am aware of who did this, some artists will record separate tracks of themselves performing every part of a song, and painstakingly assemble the result in the studio to make their album. Then they hire other people to play those parts at live performances, or just leave some parts out.
In the vinyl era, you needed session musicians on staff at the studio. If someone screwed up, you couldn't easily re-record just that track. You usually had to re-do the whole thing.
So there are good reasons why music was relatively more expensive back then. Those reasons no longer apply.