Napster and other tune-sharing services made a mess out of music industry in the early 2000s. Practically everyone aimed to download albums for free, copy it, and share with peers. Internet users were quite fond of music available for free, unlike labels and artists. The latter bore losses as their sales decreased by a half.
When times became hard for music producers, artists suffered much more than labels. While the latter made it by cutting employees, singers had to pay more for recording, distributing, and promoting their music. In a while, it became available to sell singles online, which made it easier for artists to distribute music. However, selling music is not a very lucrative option yet.
Illegal downloading is a clear damage to both artists and labels, but reversing internet piracy is as hard as reversing a climate change. Today artists make most of their money from tours and promotional offers.