This is capitalism at work, in that the bottom line and profit margins rule the day. Buying an artist's product no longer means that you are supporting the artist. The way record companies sign artists, the way ticketing companies book their shows, and the royalty distribution system all serve to bankrupt the artist and the consumer. Obviously, copyright law has not kept up with technology, thus the need for new law or, more on point, new contracts. An artist selling a million copies these days means that the artist is more likely to get a contract, videos, etc. It doesn't mean any more of your money going to the artist you "support".
Look at the price fixing of CD's for example. CD prices have nothing to do with the worth of the music or, more importantly, the cost of production. There's no gamble for the record company if they print a few million 2 cent discs if they're going to have half a million people buy an 18 dollar CD. On the other side, the artist is getting loaned the money to put on a tour, shoot the video, etc. - money that has to be paid back with meager royalties from record sales. Both sides present little risk to the record companies (win-win). But consumer "piracy" does. That's why they're so rabid. Let's not pretend that the major players are interested in the pleasure we derive from music.
What's the answer? From the consumer side, fair pricing (anti-trust, anyone?). From the artist's side, fair contracts. From the legal side, anti-monopoly/oligarchy litigation, though the record companies have much more money to spend on lawyers. From the major company side, well, nothing. They have the means of production, the venues, control ticket sales, scouting, videos, advertising, and contracts. I'm not really concerned about them. I'm quite sure if they go under, something will take their place. Hopefully, though, consumer action and intervention will lead to more competition and innovation. This argument, ironically, may be determined by votes rather than dollars.