Since you keep talking about "15 years ago," I for one can tell you that in 91-93, in Chicago, we would go out to dance to house one night, industrial the next (ministry/pigface/rev co etc, lol), then hear some albini-type band the next weekend, hip-hop nights on mondays at lower links, ken vandermark and all that free improv stuff at hothouse, the CSO occasionally, etc etc. Then, as now, mainstream music pretty much sucked and that was simply the way that it was, so we built our own musical universe to inhabit -- the idea that some magical mainstream development would provide us with our musical elixir or disseminate progressive values by way of music was almost unthinkable. So rather than see the world through some sort of ultra-restrictive lens of, say, "electronica vs. guitars," we would seek out as much music as possible, then explore outward from there. And this was at a time when people relied on word of mouth, cassette tapes, CDs, and records . . . .
Erm... but clearly what is in discussion here is the existence and (limited) success of the kind of stuff you describe. The point is that 15 years ago you could enjoy a week such as the one you describe. Is that true of now? For all the omnipresence of music, there are only a handful of musics that could have similar levels of excitement (Waiting, waiting, waiting...) Sure, you get the occaisional piece of brilliance (I've enjoyed a few choice pieces of excellent live music this year), but there certainly isn't much around.
As for the economics, it seems to me there are lots of processes at work. To break it down.
You can happily break the music industry into two sectors: Majors and Independents.
I see the following trends:
1) Proliferation of indie labels
I'd say there are probably more labels now than ever before. If we assume the majors take a constant amount of the total music revenue pie, then more indie labels will be sharing the same chunk, giving them all less. The TOTAL amount made by indie labels may well be the same, but they each get less.
Net result, less investment per artist signed to an indie > less time to make music for each artist > poorer quality of output
2) Proliferation of artists
Ditto above, due to cheap recording technology.
3) Majors taking a greater market share
Don't know if this is true. But it could be, mainly because of their marketing budgets.
Put in very crude economics terms, if you allow yourself to think of much of the output of major labels as essentially all the same, i.e. products which are undifferentiated, (which i think i'd happily say about a hell of a lot of indie rock) then the ONLY WAY to compete in market is through marketing, creating a brand around the band, that extrapolates the tiniest of USPs as much as possible.
4) File-sharing and generally very cheap music
> less of an attachment to music
> less time devoted to an individual composition/artist > less critical analysis > poorer quality of output
> difficult to weigh up financial effect on labels: (+ more people hear your music, and some may go on to buy) ( - they may not buy)
5) Demographics
Not to be under-estimated. The power no longer lies with youth. It's far easier to sell the same music back to people in their 40s than come up with anything new. And its far harder for youth to muster any sense of rebellion because they are continually squashed by grups, or whatever people are calling them now.
There's a lot going on here - think we need to distinguish between whether this is going to be another conversation about how shit everything is (or isn't, depending on your point of view), and an enquiry into the profitability/sustainability of independent music.