This isn't just a random factoid that I picked up, but what was relayed to me be multiple friends from bands that make part of their living off of music, and that mostly from merch. They are not in big well-known bands, but merch makes them enough money to pay their costs and also take time out of their freelance jobs to work on their music. They do sell some CDs, but never made a lot of money off of that (they haven't been around in a time where CDs mattered), and when I asked some of them once they said that they estimated that the loss of CD sales probably cancels out with the cheaper production costs of shirts.

For most bands that are not huge, they never made a lot of money with CD sales (in stores, not at the concert venues) anyway, as most of that money went to the labels anyway. The bulk of money was always in concerts and merch.

There are some reasons for criticizing streaming services and how they shape the music industry, but I don't think that replacing CD sales with less well paid streaming fees are a big one. That really only hits musicians that are already well beyond making a living off of music.

I personally don't like the focus on merch for funding creatives either (this also includes Youtube creators and similar), as I don't really need that many t-shirts personally that I would buy one from all of them. I rather buy their music via Bandcamp or donate to them via their Patreon.