But that's the way it always was. Record companies used to release records all the time whose sales didn't pay for the plastic, the covers, the promotion, or the distribution costs. They always were hedging bets on artists. Some of my favorite artists were net losses to record companies. The only people who bought the records were their fans. There may have been 50K nationwide, but it didn't pay for the production of the LPs or CDs.
The entire business model has changed, as we've discussed here a bunch of times. It's still changing. I think it's the end of what we used to call "mass" media. I think that as the internet model matures further, it's all just differing "content". Some content will be more popular than other content. But the competition already is massive, and I don't see that reducing. The days of news starts like Walter Cronkite, music stars like Elvis, big movie stars, big TV stars, big news writers (Woodward & Bernstein) or big anything, are slowly coming to a close.
They'll always be there. Fox still gets 3 million or so viewers a day. Walter Cronkite got 48 million. The trend appears to be that every medium gets smaller and smaller, but they still can make money if they're smart at it, if only because the population is still growing and people need media.
I don't know how it will affect radio on the local level. Maybe local streams and podcasts? Maybe radio becomes national in scope? Maybe it stays just as it is now, except it will all be delivered online?