Ars Technica has a great article about how the consumer has shifted from album purchases to singles. Many artists including Kid Rock, AC/DC, and Jay-Z have boycotted iTunes' approach to only allowing tracks to be sold individually, versus forcing a consumer to buy the whole album. What Apple has done is change the whole landscape of how consumers approach music. No longer are we bound by the chains purchasing a $10-$20 album, if all we really want is a 99 cent track.
The economics for the artist are quite simple. They make a much greater amount of money on the sale...