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Koren pop sensation Psy sing his song Gangnam Style at halftime during the NFL game between the Buffalo Bills and the Seattle Seahawks at the Rogers Centre in Toronto, December 16, 2012.J.P. MOCZULSKI/The Globe and Mail

"Some of us have health insurance, some of us don't … no one's renting private jets," said Grizzly Bear singer Ed Droste. A cover story on Grizzly Bear in New York magazine painted a picture of the acclaimed Brooklyn indie-rockers as guys just getting by. In 2012, they released a critically adored album (Shields) and sold out Radio City Music Hall. And yet the headline blared a blunt question, "Is rock stardom any way to make a living?"

The answer, as we've suspected for a few years now, is yes and no. Declining record sales have created a stratified scene. Adele and Taylor Swift are selling records by the ton. The classic rock and legacy acts are touring hard and raking in revenue. But the middle class is struggling; the old model is broken.

The numbers are in. Subscription services such as Rdio and Spotify, free video streaming on YouTube and customized Internet radio stations such as Pandora are growing much faster than music downloading. But there's not a lot of money there yet for your average recording artist. As a result, second-tier acts are struggling to find ways to make a living from their music.

Downloads

The growth in digital music sales has slowed considerably in the last two years. Australian rockers AC/DC finally allowed their music on iTunes, cashing in on 696,000 digital songs and 48,000 albums sold in their first week online. That's a Whole Lotta Rosie, but it is an older generation plunking down its 99 cents. A recent Nielsen survey revealed that 64 per cent of U.S. teenagers mainly listen to music on YouTube. It seems clear that music ownership, even digitally, is a dying phenomenon.

Streaming Services

Research carried out by industry-watcher Strategy Analytics estimates that streaming services will generate more than $1-billion for the global music industry in 2012 – a rise of 40 per cent from the year before. That surge means that music streaming is the swiftest-growing sector of the industry. However, while Psy and his Internet infection Gangnam Style reportedly earned $1-million through his share of YouTube ad revenue, Ellen Shipley, the co-writer of Belinda Carlisle's Heaven Is a Place on Earth, reported receiving $38.49 for the 2,118,200 streams the track had accumulated on YouTube in one quarter.

Physical Sales

CDs and vinyl are still prevalent – 61 per cent of the world's music sales – but purchases of physical products dropped by 12 per cent, even though artisanal vinyl sales are still on the uptick. In 2012, the English singer Adele continues to lives in an old-school bubble, selling enough of her 2011 album 21 to land atop the Billboard 200 chart for the second consecutive year. The Rolling in the Deep star also rolls in the black. On the other hand, talented singer-songwriter Mark Eitzel was only able to record his latest album after a friend who'd won the lottery decided to help him out financially.

The curious singer-songwriter Beck didn't even bother to record his latest music. His Song Reader project involves 20 songs released in sheet-music form only. In an interview by fellow musician Dan Deacon for the Huffington Post, Beck explained his reasoning: "I think about music I recorded in the last 10, 15 years, and I can tell you there's a lot of music that's lost forever because it was on a hard drive. We have musical manuscripts from 400 or 500 years ago, so they may be things that last longer."

Touring

The conventional wisdom is that artists will have to make do with touring revenue. In 2012, the three top-grossing international touring acts were Madonna, Bruce Springsteen and the E Street Band, and Roger Waters. All three juggernauts logged 72 concerts over the year.

Waters, who has not released a new studio album of rock material since 1992's Amused to Death, continued his road revival of the 1979 concept album The Wall. The final leg of a tour which began in 2010 grossed $186-million (U.S.) in box-office receipts and 1.7 million in attendance, according to Billboard magazine, and ran up a total of $378-million in ticket sales over the three-year tour – sixth of all time in that category.

The class divide

Those numbers represent rarefied air, however. The legacy acts can't last forever, as much as the Rolling Stones continue to argue the point. In 2012, the Southern singer Chan Marshall (a.k.a. Cat Power) revealed that she was broke, even though her latest album (Sun) debuted on the Billboard Top 10 and she regularly sold out her club shows.

This weekend, Grizzly Bear tweeted an idea for holiday gift-giving, suggesting that its Twitter-based fans purchase an album for the "person who never buys music," which would surprise them and let them now that there is "still great packaging and art!"

A quaint notion, and perhaps a desperate one. Fans are willing to support their artists, but there's a limit. Amanda Palmer raised a mighty amount of money through Kickstarter to fund her new solo album, but endured a storm of criticicm when she asked for volunteers to play with her for no pay when she went on tour with her band.

In an eloquent address at Toronto's International Festival of Authors this fall, writer Rohinton Mistry discussed his love of music. As a boy in Bombay he would enjoy the transcendent effect of the family gramophone, on which he would watch the records spinning, the grooves seeming endless – "Suddenly, eternity was not an idea that evaded grasping but music that played forever," he said.

Music does play forever, but not on a gramophone.

TOP 10 MUSIC BREAKOUTS OF 2012

Django Django: It bears repeating that the double-named British adventurers released a heady blender of danceable, swirling psychedelic rock. (In other Django developments, Rick Ross's 100 Black Coffins, the lead single from the soundtrack of Quentin Tarantino's Django Unchained, was the year's top rap track.)

Six Shooter Records: The plucky Canadian alt-country label started up one festival (Interstellar Rodeo, in Edmonton), improved on another (Sleepwalk Guitar Festival, in Toronto), and delivered a parcel of fine albums from Whitehorse, Danny Michel, Jenn Grant and Amelia Curran.

New British soul sirens: Lianne La Havas, Emeli Sandé and Jessie Ware make up the year's sweetest-sounding sorority.

Kid pop: One Direction, the Wanted and Cody Simpson burst out like new-found acne, while Vancouver woman-child Carly Rae Jepsen, 27, waited by the phone.

Male R&B crooners: Frank Ocean (Channel Orange), Miguel (Kaleidoscope Dream) and Toronto's enigmatic lover man The Weeknd (Trilogy) epitomized the dark, dense soundscapes and desirable, wounded characters of the year's best neo-soul fashion. (Ocean was also involved in another mini-trend: Impassioned, heartfelt open letters. In Ocean's case it was an elegant disclosure involving same-sex attraction; in the case of the world-citizen rapper K'naan, it was an apology for his lack of artistic integrity.)

Comebacks: Welcome back Bonnie Raitt, Soundgarden, Beth Orton, ZZ Top, Jimmy Cliff, Smashing Pumpkins, Dwight Yoakam, Patti Smith, Fiona Apple and, the most improbable return of all, Tupac, who was holographic at Coachella. (Still waiting for that album, D'Angelo, but take your time.)

Professor Meowington: Previously a YouTube star, the tuxedoed kitty who allows himself to be cared for by Canadian DJ Deadmau5, was ready for his close-up in 2012. The multitalented mouser graces the cover of the EDM superstar's >album title goes here<.

Sharon Van Etten: With help from the National's Aaron Dessner, the Brooklyn-based songstress delivered Tramp, a narcotic, moody masterpiece from an artist whose potential was realized in a dozen dusky songs.

Kendrick Lamar: The boyish-looking Californian was the year's breakout rapper, no disrespect to the feloniously named Killer Mike or the bling-specific 2Chainz.

Psy and his Gangnam Style: The South Korean entertainer rode an imaginary horse to Macarena level success and proved to be a pleasing counterpoint to the rocket-happy leader to the north, Kim Jong-un.

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