I've got a couple records out (1 EP, 1 full-length, writing credits on a few others and one more release coming soon) and we've made more money playing out than we ever made on the recordings. However, it was also a garage-punk band and it's easy to work into a format that attracts people to the show (Drink beer. Fall down. Drink more beer, need more feedback, detune guitar on someone's face. Drink more beer. Climb on tables. Break a few strings. Drink more beer. repeat for the next 10 songs). Unfortunately for most electronic acts (industrial, etc), it's hard to discern if the artist is actually doing anything other than checking his myspace/email. This seems to be a big turn-off for many people. "It's just a couple of guys fucking around on their laptops, big deal" while ignoring the idea that most "traditional" bands are a few guys fucking around on their guitars, drums, basses, etc. I've seen my share of live acts at Das Bunker and, well, I'd almost just rather listen to the CD. I continue to go to help support the bands I like because gas is expensive. I've been on that end of the tour before when you just hope that you make enough to get you to the next gig. The 1 or 2 CDs sold at the show help, but it's definitely not a make-or-break issue.
I think a lot of customers/fans have some sort of weird image of musicians. They see these worthless pieces of Pop stardom shit and their antics and think "oh, rock stars have it so easy!" when the facts are, for every Britney Spears, there's 10,000 guys washing dishes and working shit jobs, scraping by and trying to save for the next tour. All those "exotic" trips to other countries are basically business trips. Instead of seeing sights and enjoying things, you're lost in some city, trying to find some shit-hole venue, which is hard enough in the country that speaks your native language, sobering up from the night before, drinking heavily because you're sleeping on floors or cramped up in the van for hours on end, etc etc. Come on, the guys in Voivod work at freaking Guitar Center.
Anyway, most consumers don't seem to get that the majority of the musicians they idolize and listen to probably don't do music full-time. It doesn't help that the musicians rarely see much, if any, money from their albums.
I see a opportunities for labels. The majors are just incredibly slow to adapt to new business methods and this is a terrific opportunity for some smaller label to really do well. Labels do a great job of sifting through a lot of stuff and getting it to the consumer. Yes yes, the internet, the great equalizer, allows anyone to put their music out on the net, and anyone who tries to keep up with it realizes that it's impossible. The signal:noise ratio is completely fucked. I see labels like ant-zen and the like putting out special, limited editions with lots of goodies as ways to entice people to buy the products as sticking around. I also see labels who run lean and mean, with a focus on quality over quantity to potentially do well, too. Then again, CD Baby has a ginormous digital catalog and while the artists might not make much, just the aggregate/volume more than makes it worthwhile for them.
Anyway, what this leads to is: piracy has always been an issue. From counterfeit records/tapes/CDs to mp3s, it's not going away. In a way, it's like what some pop artist said when he found out over a million "pirated" cds were sold in India of his album: "I need to set-up a tour of India!" The artists have never really profited from the sale of albums. This doesn't justify piracy, mind you, but it does mean that for most artists, whether you steal it via USENET or whatever, it doesn't mean anything to their bottom line. They're still washing dishes. As an artist, I don't care if you download it from the net. I DO care if someone is churning out fake CDs and selling them for profit.
I will say that joining a subscription based service, such as Napster, has alleviated most of my discomfort regarding "free" music, but PlaysForShit sucks ass for mobile devices. I hate to say it, but the damn Zune store actually looks pretty attractive in terms of hardware/software combination for subscription music, but they seem to be a little light on a lot of industrial (compare Zune to, say, Napster, for anything on ant-zen, hymen, alfa matrix, etc), which brings us back to piracy. :/
bah, i'm reduced to rambling, so I'll stop here.