Their "physical distribution" by means of a complex technological infrastructure involving microphones, amplifiers, speakers, lighting, electricity etc. etc., which, as you point out, "the artist didn't make," but which the artist wishes to leverage in order to make a greater profit.
The argument of "well you didn't invent TCP/IP so you can't expect to make money distributing digital copies of your music" is the slipperiest of slippery slopes, as none of us personally created all the technologies we use to make a living. I use a laptop, text editor, and web browser, none of which I created: have I forfeit my right to make a living as a web developer?
It seems that the simplest, most generic expression of your argument (correct me if I'm wrong) is "No one can reasonably expect to make money on anything which can be reproduced digitally, and this is more or less fair." I disagree.
if you work a day for me and then I decide not to pay you, you aren't any poorer than you were before so no harm right?
In the absence of a contract (if I just decided to work for a day for you without your prior agreement to pay for the day of work), yes. Doing work does not automatically create an obligation of others to pay you for having done it.
There are two things that can create such an obligation:
* altering something you already had (such as an object or your body)
If I work a day for you, it is a day that I am not able to work for someone else (possibly myself in my own business). So, yes, I have lost a workday. If I am not compensated for that workday, then I am that much poorer.
"If I take an microphone from you, you don't have an microphone."
..and so I have to buy a new one if we both want to have one at the same time.
"If I copy a song from you, you still have the song yourself."
Awesome, we can just buy one then and split the cost! But why stop there? Let's also give a copy to Tom, Dick and Harry so that each pays 20%! Now, what if we could somehow share the song and the cost with a hundred million people across the world..
I do, do you? Microphone sharing (a) means only one person at a time can access it and (b) it is way more inconvenient. Microphone creators are not threatened by sharing, digital creators are.
If someone steals 20 microphones from the mic creator he has 20 microphones less. If someone downloads 20 songs from a song creator the creator of that song still has the song.
And say, with your wife and children ? Would you share it with them or make them pay too ? And when you listen to the music, streaming, with friends at a party you throw, do they all have to pay ?
And in most cases you pay for a unique concert, sure it's the same songs as the last show but musicians rarely play the music exactly the same way. The best concert include a lot more than just playing the songs. It's worth paying for. The best concert artist put on an act and improvise on stage. It's not easy and it takes talent and work.
This is of course an opinion (one I generally share).
Generally the more niche something is the less fans it will have but the more those fans will love it.
A lot of pop music and modern moves + video games are designed specifically to appeal a bit to a large number of people. It's almost impossible to create something that appeals a lot to everyone.
So the other option is to find a small niche following and concentrate on extracting the most amount of money from them. I imagine that without some form of copyright most of the music produced would either be stuff produced by musicians for other musicians or for the upper classes who would fund it's continued development.
