I dunno.. even here in new zealand, very much not a musical hub, i still know plenty of jazz musicians who make a living off of music, and there is generally at least 1 jazz gig every week.

I also think the industry is pretty tolerant of more experimental/non-pop music, just that this isn't really true for the rock scene amymore. Hardcore punk, hardstyle, dubstep, hyperpop, shoegaze are all huge genres now, large enough to live off of and perform at festivals as big as coachella.

You may be right about Damon Albarn but that would just be a result of which genres have listeners who are willing to listen to smaller, non-mainstream artists. I think the biggest example of this is that mainstream rock music a la guns and roses has pretty much completely died out, while genres with smaller, more dedicated fanbases like post-rock and noise rock are still going strong as ever. I'm sure if you check your local shows (and you live in a place with reasonably large population) you will be able to find plenty of bands who completely live off their music.