CDs aren't the only merch to sell and all the other stuff (shirts, etc.) is easier to produce than ever and very profitable, and I feel like most people are well aware of that being one of the most direct ways to support their favourite artists.
I hear this argument a lot, but never from musicians. I think it might be a factoid that music listeners spread around because it makes us feel better about what seems like an irreversible movement in the industry (which benefits us, since we get to pay less money for music).
But in the end, if we want to incentivize artists to focus on making good music (as opposed to merch) we should probably be paying them for the music. That’s not to say we can will the current streaming trend out of existence (we can’t), but we shouldn’t necessarily let ourselves feel good about where this is going.
This isn't just a random factoid that I picked up, but what was relayed to me be multiple friends from bands that make part of their living off of music, and that mostly from merch. They are not in big well-known bands, but merch makes them enough money to pay their costs and also take time out of their freelance jobs to work on their music. They do sell some CDs, but never made a lot of money off of that (they haven't been around in a time where CDs mattered), and when I asked some of them once they said that they estimated that the loss of CD sales probably cancels out with the cheaper production costs of shirts.
For most bands that are not huge, they never made a lot of money with CD sales (in stores, not at the concert venues) anyway, as most of that money went to the labels anyway. The bulk of money was always in concerts and merch.
There are some reasons for criticizing streaming services and how they shape the music industry, but I don't think that replacing CD sales with less well paid streaming fees are a big one. That really only hits musicians that are already well beyond making a living off of music.
I personally don't like the focus on merch for funding creatives either (this also includes Youtube creators and similar), as I don't really need that many t-shirts personally that I would buy one from all of them. I rather buy their music via Bandcamp or donate to them via their Patreon.
This is true, but a tiny proportion of people buy merchandise compared to music. You will always find the t-shirt stand easily accessible at a gig for the artist despite the thousands of people at a venue, so believing that t-shirt sales will someone keep the artists profitable is likely wrong.
I don't have the personal experience from gigs with "thousands of people", as the only ones I've been to were not that huge, and at those the merch stands were always swarmed. If you are playing for an audience that big you are probably already good on ticket sales alone (which also tend to become more expensive once a certain audience threshold is crossed).
I also wasn't just guessing/assuming that, but relaying what I've been told by friends who are musicians (see also my sibling comment).
