How do artists make so much money when today there are so many streaming services and we pay a very small amount to have access to a huge amount of songs?
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Artists make money off of concerts, licensing, and endorsements.
When it comes to concerts if an artist is on tour by themselves (in many cases) they get pretty much all the profits. The venue takes a portion of ticket sales (and some other things), then the artists pays all their expense and payroll, and everything left over, all the profit, goes to them. For established artists this can be quite a bit of money. For example it is estimated that when Bruce Springsteen & The E Street Band play football stadiums they make $2.8 million a show. Major pop artists who are playing more normal venues, like Justin Bieber and Drake, can make around $1 million a show. In 2017 the headliners at Coachella made around $3 million each, and artists further down the lineup could still make around $10k. Touring can be very lucrative, and can be a source of income that continues long after an artist has stopped putting out chart topping hits. A great example of touring is [U2](https://www.billboard.com/photos/8465835/highest-paid-musicians-money-makers); in 2017 U2 made $54 million, $52 million of that was from touring.
Licensing is also valuable. Artists can make a good deal of money for letting a company use their song in a movie, TV show, commercial, or video game. In addition artists are often given royalties for licensing a song, so when they play that movie on TV and it makes more money the artist gets paid. For example every time they play a re-run of Friends the band who wrote the theme song, The Rembrandts, get a check. This amount isn’t usually massive, but it can be a good source of income.
Endorsements are a major factor too. You can make good money for being in a commercial, but the really big bucks come from equity. If an artist (or any celebrity) is big enough they can get “paid in equity,” which means that instead of getting a paycheck for their endorsement they get a percentage of the profits or even part ownership in the company. For example Michael Jordan (not a musician, but a good example) gets a (roughly) 5% royalty for every pair of Air Jordan shoes sold. So if you buy a pair of Jordans for $100 he gets $5. Musical artists can make money in a similar way.
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