Would it be inappropriate to say that things are this way given supply and demand ? There are just so many people playing music out there, and wanting and willing to pay for free, that these less-talented people/bands are filling the needs of the club owners and crowds, and even willing to pay to play in order to do that. When the supply of musician's that can satisfy the typical restaurant dining crowd, then the pay will go up. There must be far more mediocre musicians out there than there were when you guys enjoyed your 'hey day' generations ago. And the availability of low cost, online lessons and practicing programs is fueling that. That's why I've often made a comment regarding "I don't know how anyone makes money in the music business today if you're not a pop superstar." DJ's can 'generate' enough music for a crowd, and to one of Pat's previous points - there are not enough musically educated, or 'educated' to the point of knowing, seeking out, and being willing to pay the the difference for a band that has mastered their instruments vs. a mediocre band that brings friends and family, or offers a one man show.

There was a time - I'm guessing early 1900's and before, where most people that played music did so in their home for the social aspects, entertaining themselves and their guests, and the joy of playing music. Now, with all the video games, flat screen TV's and great HBO series and movies (and don't forget Downton Abbey !) there's even less need for all the work required to learn to play an instrument (gratification is too delayed).

I think the only chance most above average musicians have in generating some decent side-money from music is in giving lessons - and there, you're also competing with a group of less talented musicians willing to do it for much less money than makes it worthwhile for an experienced, educated, musician.

Times have changed - and so has the model of making money in music, and the hardest hit are those talented musicians that are not superstars.

...IMHO, from my personal observations. That's why I'm glad to have my 'day job' and do music as a hobby - and that's why I don't prioritize more of my time to become more of an expert musician. It will come as the rest of my life and personal priorities allows time for it. And I might even be one of those guys that occasionally plays a gig for very little money - but probably at a place that doesn't regularly pay money anyway.