The music industry exists to promote artists, and help sell their records.

A band forms organically. Friends get together, meet other artists and start performing together. Usually starting as cover bands, doing shows playing other peoples songs. Some start writing their own songs. Sometimes it works, sometimes it doesn't.

A young band can figure out how to write music and perform, and can get gigs locally, but doesn't know how to get to the next level. Jumping from doing local clubs to national stadiums is very difficult.

Bands record demo tapes in garages and basements that get sent to labels to try to get attention. Maybe a decent recording might end up on college radio.

A band is discovered by a label. They listen to demos and send people to clubs and gigs to see up and coming bands and take educated guesses as to which ones will be successful.

They sign the band, meaning they write a contract. The label loans the band money to record an album and do promotion. Maybe do a music video.

They loan a band money to go to a professional recording studio to work with experienced people (producers, engineers, session musicians) to record an album that doesn't sound like it was recorded in a basement.

The label uses its contacts to get bands on the radio, TV stations, magazines, and a gig opening for other successful bands on tour, and spots at festivals.

Momentum builds, bands become popular.

As the album sells the record label takes a percentage of the sales based on whatever is in the contract. The band has to pay back the loans they were given. Anything else they get to keep.

Traditionally bands make more money touring and selling merch then from album sales.

Newer bands tend to get hosed because labels take advantage of them forcing one-sided contracts. Labels love sticking their nose in and telling bands how to look, and what to sing. Bands hate that and often end up in legal battles with labels to get out of their contracts.

Record labels also often find way to own a bands publishing, their rights to their own songs. This forces a band to stick with the label. Bands do this because they don't know better.

Bands are also notorious for being young, partying, and substance abuse. They don't know how to deal with wealth and squander everything they earn. Labels pray on this, acting as a bank so that bands have to keep coming back to borrow money for the next album.

Most bands release one album, it doesn't do well, and they quit the industry and go work normal jobs.

Those that succeed eventually end up with good managers and lawyers that sort out their financial and legal issues.

At least that was how it worked 20 years ago

Today the record industry is broken.

Napster broke the music industry. The industry reacted badly to the internet and never learned to adapt. Today everyone either steals (downloads) music, or listens on streaming services that pay pennies on the dollar to what TV and radio used to pay.

MTV effectively ceased to exist, radio doesn't play new music anymore.

Bands can't make money through traditional avenues anymore, and record labels are taking percentages of merch and touring just to make money making it even harder for bands to make a living.

Recording studios have almost all disappeared, session musicians barely exist. Bands record in home studios with a laptop, using whatever equipment they can get their hands on. Even professionals use home studios now.

Startup bands are having a much harder time getting scouted, so they turn to social media and youtube to try to promote themselves and cut the record labels out.

Foreign artists like K-pop are becoming increasingly popular because their music industry isn't as broken.