article via www.theatlantic.com:
In the 1950s, it was not uncommon for a band to make money off an ancient bit of technology known colloquially as an "album." People bought "albums" in exchange for money that was divided mostly between the store, the label, the distributor, and the band, which included not only the artists, but also producers and lawyers.
In the following 60 years, music hasn't died, but the old business model quite nearly did. People still buy solid, non-digital albums. Millions of people, in fact. In fact, vinyl sales are projected to hit 3.6 million in 2011, more than 10-times the figure from 1993.
But the vast majority of music we listen to comes out of the Internet, where most of it is free. How are bands supposed to make money off of clouds and $0.99 files? This extremely cool chart from the folks at Information Is Beautiful, based on a post at The Cynical Musician on digital royalties, explains: