Piracy has been falling as a primary mover of free music for quite a while now.
The shifting of the market to branding and merch has been going on as long as I've been in the industry. I was a big part of it at Warner for a while, in our direct-to-fan initiatives.
The problem is where money in these companies is invested. They need to be technology oriented entities, but don't want to be. Apple cleaned the clock on that, and they let them.
I wouldn't be surprised if that income is quite substantial.
Probably costs more to account it to the artist than the actual royalty.
"Youtube partners will make in the range of $2.5 to $5 per 1000 video views The most popular stars will earn $5 per 1000 views. This can really add up if you have 1 million views per video. Nigahiga for example, will earn $5000 per video they put up. This range can vary depending on number of advertising clicks."
http://www.independent.co.uk/life-style/gadgets-and-tech/new...
"Shane Dawson's estimated earnings from YouTube advertising on his video clips in past 12 months: $315,000"
I'm sure it varies wildly based on content, how the users got there, etc
You could also go to their concerts, buy their gear, go to their appearances, etc.
This is how music industry works in Korea, where most all music is given away for free
Also, I don't know about you, but the idea that you should support musicians by buying "gear" (I assume you mean stuff like t-shirts) just seems very, very mixed-up...
Music was free before copyright came along in the last couple of centuries, and is natural for it to be free again now that distribution and sharing is even easier. Already there are plenty of people releasing their music for free, and there is no reason why everyone shouldn't do the same.