Interesting post. I'm completely uninformed about music, so I can't give any opinion. But you paint a pretty bleak picture of mainstream music here. What about the indie scene? Is it in better shape? Do indie artists producing quality work manage to break through?
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As an active producer and former musician I am totally disappointed in today's mainstream scene. Indie scene has never been stronger, because today you don't need shiny equipment and a huge studio for making a solid indie track. You could settle yourself with budget equipment and a pc.
Indie artists that produce quality work actually do break through but it is a painful process, even though they claim that it is a lot better than being mainstream. You are your own boss when you are independent, that's where the name independent comes from in it's core.