the study I mentioned is called
Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market – Duncan J Watts et al
http://www.sciencemag.org/cgi/content/abstract/311/5762/854
Abstract: “Hit songs, books, and movies are many times more successful than average, suggesting that “the best” alternatives are qualitatively different from “the rest”; yet experts routinely fail to predict which products will succeed. We investigated this paradox experimentally, by creating an artificial “music market” in which 14,341 participants downloaded previously unknown songs either with or without knowledge of previous participants’ choices. Increasing the strength of social influence increased both inequality and unpredictability of success. Success was also only partly determined by quality: The best songs rarely did poorly, and the worst rarely did well, but any other result was possible.”

Ted.com
Larry Lessig: How creativity is being strangled by the law
http://www.ted.com/index.php/talks/view/id/187

Enjoy!
drop me a line when you want to talk about this some more

this is truly a key intersection point in the digital media and social media space

interesting questions

there is a great video about digital licensing at Ted.com that you must see as it is very pertinent to your post

secondly I agree that the socializing aspect of music has disappeared (at least compared to my Led Zeppelin generation)
and with it the long tail of music artists has emerged .

there are few icons that will last more than 5 years on the music scene – to this generation’s detriment

there is also a great study/experiment that duncan J watts did to simulate the online music world – seems that who wins or looses the popularity contest is quite arbitrary

will come back here a bit later and bring all my links and material to finish off my comment

Miro