Record companies are paying for the music. It takes a lot of money to produce tracks. Most artists never get enough fans or sales to pay off the investment the record company made in them, so the hits very much pay for the failures.
Even Justin Bieber, Lorde, and Billy Eilish depended on record labels to actually profit from their music, though they all broke out on social media platforms on their own.
The barrier has never been lower indeed, but it's the barrier to get started and it's still easily a many-thousand-dollars affair - a good recording and Soundcloud isn't everything you need to make money, especially not on a scale you'll be able to make a living from. Production of physical media (especially currently en vogue vinyls) is expensive plus there is a very real "inventory risk" (aka, the risk of being stuck with a truckload of vinyls no one wants to buy). Events and concerts are expensive AF to set up if you want more than your local community center or pub, touring is even harder to pull off (and the bigger the venue the more expensive the upfront, non-refundable costs go).
Most small cover and indie bands barely make ends meet, most work full-time jobs to finance their band hobby and spend sometimes their entire weekends and vacation time because they have to do lighting, rigging and sound system setup themselves wherever they get a gig. And corona has raided everyone's funds dry.
Not to say big studios aren't a bunch of unscrupulous, exploitative vipers because they are, but unfortunately their business model is far from dead.
(Source: know people still in this business, did myself a stint as a stagehand and as a renter of my small scale sound/light setup a couple years ago)
What I was highlighting is now the money doesn't even pay directly down the line. The long tail literally makes nothing from people directly deciding to support them by choosing their recorded music. At lest before, if a small band sold 1000 CDs, they'd see the royalties from that.
I think the Supreme Court is going to continue to rule that neat hacks are not really going to get you out of what the law says, but also that the "content producers" are not going to be able to arbitrarily restrict a reasonable service as in the Cablevision case.
What the public really wants is a way to enable the thing they want without either exorbitant costs or heavy annoyances. We're not getting that because the system is not set up for automating micropayments or microdonations and the big operators are writing all the rules. For example, if I pay for a streaming service and listen only to one obscure band, I would expect that my monthly fee would go to them. Instead it goes to the top 100 and a tiny fraction goes to my obscure band, who really don't benefit at all from being on the service. If I had a micropayment platform, my consumption could be going to that band with a fraction going to support the platform.
In other words, record companies are killing music, and it's legal. That's what we need to fix.