I agree with your argument that super niche, more niche than before, is how music is working. There are good bands out there and I don't dispute that. But do you think niche means local too? Essentially, am I only going to hear a band if I live or travel near it? Does the new stuff have a radius limit?
I think there are people hungry for new music that may love something that a new band is cooking on other end of the continent, but they've never heard of that band and they have no way to find it. Maybe that's a problem some new app is going to fix, but I think it's a big problem. I joined Pandora to try to find new music, and yet they don't play much new stuff that relates to what I like. MTV doesn't play music videos anymore. All the ways the kids found the music before is different or missing, and there are a lot of music lovers that feel lost.