Great topic, I agree that making money in the traditonal since of the music business is all but impossible. However luckily since the internet has been around it is much easier for people to carve out a niche or a sub niche and make good money. Although as an independent you may not make millions of dollars you can certainly do very well for yourself. Best of all you can keep creative control of your music. The record label are not stupid since they no longer make the kind of money they use to with physical album sales they do their best to lock you up in contracts if you don't produce for them right away. So the best thing to do is not get caught up in the hype of thinking you are going to be the next lady Gaga unless you are ready to open yourself up to getting your creative control taken from you and potentially setting on the shelf never to be released.
There are tons of way as an independent you can make money, but ultimately you want to build an asset of list of people who support you projects and keep that list growing by engaing those people over and over again. When you can do this you can not only promote your own music but you can promote other peoples projects an make money in a partnership deal. It is all about being creative. If you build a list of local followers you can promote local clubs and make money that way. It really just depends on who your list is and how you want to promote yourself.
Tyjon Hunter