If you look at the entire group of people who listen to music (and make music on their own), I don't believe this analysis fits very well. It may fit for some part of it, or for parts of the music industry, but music is more like film or theatre than it is TV or video games or other art forms.
You have a group of people who just want to hang out with their friends and whatever is popular with them is "good enough" to meet that need. This is analogous with multiplex viewers. Then you have people with specific tastes or interests. They are often willing to spend more (by an order of magnitude) than "typical" listeners and less likely to care if lots of other people come along with them or not. This is similar to art house film-goers judge what to watch. Finally, you have people who may be amateur or part time musicians themselves and appreciate a different take from everyone else. They can even be trendsetters in whatever new music that comes out. In the film analogy, they could be people who set up, run, review, and/or submit movies to film festivals.
The thing is, you may be able to influence one group of people with your approach to controlling and marketing music even if the music is self is mediocre, but those people also care less and are worth less than the other segments. And the way the music industry is going, they may not be worth much at all individually (which I think was the point of the OPs quote from David Bowie).
In tech, this would be the Bing.com approach to search versus alot of other startups which seek to grab the early adopters first and then pull in more mainstream stuff later. It can work, but not as well over time.