I don't think artists ever did make money on the recordings - at least not most artists. I read an article on the Jayhawks at one point that made this claim - at that time, they had the biggest hit of their carreers with "Blue" and they were touring, but one of the band members commented that the roadies were making more money than they were. He said that all of the money that the record company had invested in creating and promoting their albums and videos had to be repaid from the band's share of the royalties before they would get any money from the recordings, and even with a big hit like "Blue", they couldn't forsee a time when that would happen. I heard a similar comment later on from one of the members of the Rheostatics (if memory serves). It was in response to a question about the impact of peer-to-peer downloading on his income, and he said that they didn't make any money from their recordings. They made money from playing shows.

I wonder if this is partly why the cost of concert tickets is so absurd now. I recall when I was in high school and even university, I could go to a major concert for a reasonable amount of money. The cost of an album was $12 or $13, and a concert ticket was 2-3 times as much. Now if you want to catch a major act, the cost of a ticket is 10x the cost of a CD or more. Maybe they're trying to recoup the cost of all that downloading with the concert tickets.