I'm admittedly out of my element here, but is it not true that more of your dollar goes directly to the band through a concert ticket purchase than a CD purchase? That was my original point.
As recently as the 90s this might have been 80 percent true. Labels were still ginormous and you could guess the contract based on band status. You knew REM had megabucks regardless if they sold another album because they had a label bidding war. And you knew whatever new bands shared a label with REM were the ones paying for REM's signing contract.
Here's how this typically works, even today:
- A label signs you and offers you a recording contract. You might get a little upfront money which you and your bandmates promptly blow by buying everyone in the bar a drink.
- You go spend 50 hours in a studio, half of which is just getting sound and watching the producer talk to his spoiled daughter about why she can't get a Mercedes. There's an engineer there and maybe every now and then someone from cartage for the gear you rented to make these recordings. Then you spend another 50 hours fixing the crap you just recorded. If you and the label are really careless, you're practicing and writing songs in the studio, which sends costs through the roof. Big labels don't let new bands do that unless they're with a whip-crack producer.
- You meet with the label's marketing staff and they tell you the name of the CD, what single they're going to support, when it's going to drop, how much money they're going to spend marketing it, and when and where you're going to be the next 300 days. It's usually at this point they have you sign some more docs where most bands learn they are now being billed for all the studio time, producer time on the phone with his daughter, cartage, food for everyone, marketing, printing, and who knows what else.
When you first signed your contract you thought you were getting paid. It's right about now you realize you were going into indentured servitude and now you have to spend a year or two on the road on the Yellow Snow Beer Tour to gain enough money to pay back your label for the luxury of recording, marketing, and distribution. For Hole, IIRC, Courtney Love said they started their first label tour about $2.5 million in the ... well, the hole. At the end of that tour, they each went home with about $40,000 for all of their troubles. That was pre-tax net income. So you betcha, Hole wanted their CDs sold because it was the only way they were going to pay the rent.
I think this whole "bands make most of their money from the tour" thing was a combination of seeing megabands do exactly that -- Pink Floyd, Rush, Springstein, Police, etc. -- and people wanting to justify illegally downloaded or shared music. As a general rule, though, unless you're well-established, tours aren't much more than indentured servitude, and the residuals from the CD are what young artists still need. Besides, if the music doesn't SELL, young artists don't get to make more music. Most bands, maybe 60 percent or more, fold while still owning the label money.
