Consider the proverbial straw that broke the camel's back. Now, think of the Christian music industry as the camel. As the economy continues to falter, might the straw be upon us even now?

An extraordinary number of things have worked against the Christian music in recent years, even before the recession—starting with illegal downloads. (Yes, even Christians steal music.) There was some relief when Christian music found its way into stores like Target and Wal-Mart, but sales didn't increase much, and Christian bookstores were hurt. Radio found a formula and a target audience, but record labels, feeling the pinch and afraid to take risks, focused so much on that target that music became homogenized. Now radio is pinched as well.

The camel's knees are starting to buckle. But is the recession enough to break the entire industry?

"The money is just drying up," says John W. Styll, president of the Gospel Music Association. "And it's not being replaced."

Industry veteran John J. Thompson is more blunt: "In the last four years, the sky has fallen. The industry is not what it was, and will never be what it was."

New recording artist Stephanie Smith says she has to work an extra job because "it pays the rent. Music doesn't. I have a college degree and I have a record deal, and I work at Starbucks. That's my bread and butter. It's just not how I envisioned it."

"I know a few songwriters who are struggling enough that they're on the verge of calling it quits, which is tragic to me, kingdom-wise," laments veteran indie artist Andrew Peterson. "God has gifted these people to shine this light, and the state of the economy right now isn't allowing them to do that. That kills me."

Many Christian bookstores have closed their doors. Many at radio stations and record companies have lost their jobs. Trade show attendance is way down at gatherings like the recent GMA Week in Nashville, where Styll estimated that registration was down 25 percent, but others thought it was much worse than that; some observers said it seemed like a "ghost town" compared the typical bustle of a GMA Week.

Still, while some of the industry's "camels" have broken, the industry itself is still standing. But it's already a very different industry in many ways from even a couple years ago, and it may never look the same.

Bad news all around

Economic struggles have impacted every aspect of the industry:

Artists live a far less glamorous and opulent than most people think. "Once a quarter, I get a royalty check for like $200," laughs Peterson. "You don't make your living off of that, and you never know how much it's going to be from one quarter to the next." Artist income comes mainly from touring and from merchandise sales at those concerts. Lately, fewer people are attending concerts, meaning lower merch sales. Also, church giving is down, so honoraria for artists are smaller. And for a full band on tour, "the economics are totally different," says Rush of Fools' Wes Willis. "With a solo artist, it's one person or maybe a spouse, but in a band it's not one or two people, it's eight or ten, with spouses and families. The effects are multiplied because the income is divided."

Downhere's Jason Germain agrees. "It is much tougher to keep a band afloat than a solo artist. The economic stuff has hit us, but we've tried to stay close to the ground. We don't have a ton of overhead. We never bought ourselves a bus; we haven't done some things that other people think of as necessary. We wanted to be flexible enough to not hamstring ourselves." Nathan Clark George has taken minimization of overhead to an extreme—by living with his family in an RV and by playing smaller churches that can't afford big-name acts. "When they know they can't pay you, thankfulness is way up, because they know you're sacrificing, just like they are. People have been very generous. They have handed me a ham, or they've given me broken guitars, since I've blogged about how I like to fix old guitars."