As a musician and songwriter I find it amusing that the large media conglomerates 'The Majors' did anything but create an closed system, that only that the anointed could enter.
I have watched the heavy-handed tactics of ASCAP / BMI in their 'enforcement', bulldozing anyone who would stand in their way. Not to mention the dragnet of lawsuits from the RIAA, using their copyright bludgeon.
The value you speak, was not created through true market forces but a controlled system of monopolies that relied on payola and 'insider information' to sustain their industry. It was 'services' such as Napster that opened people’s eyes to the true diversity of music, which never existed on mainstream radio.
The 'cottage industry' you refer is the power the 'modern musician' has at their fingertips, V.S. the controlled environment of the rent-a-studio producer and engineer, with a union watchdog that would make it impossible for the 'Artist' to touch a knob. If this story is to have a happy ending it will be the relegation of the Majors to marketing and distribution, signaling the end of their unsustainable business model.