Whenever we talk about the importance of freeing the infinite and charging for the scarce
when it comes to music, we end up having people try to simplify that down to "make money on concerts." That's never been true, however. While we do think performances are one scarcity that is worth exploring, and which has proven to be quite lucrative for many performers -- both large and small -- we've never thought that live concerts alone would suffice as the business model. There are other, more important scarcities, such as access and attention, that can be much more lucrative. Still, it's worth exploring how well live concerts alone could do in replacing recording industry revenue, and in a long (80 pages) and thorough paper by Mark Schulz (a law professor), exactly that exploration occurs
(thanks to the anonymous reader who sent this in). It's well worth reading, as there's plenty of food for thought. Basically, he points out that free file sharing can help many artists in numerous ways, but he's not convinced that touring alone can help. He goes through a pretty thorough explanation for why touring alone isn't enough -- including the fact that a disproportionate amount of the profits from live performances tends to go to a rather small number of artists, just as the number of musicians creating music is exploding.
While I think the paper is worth reading, and makes a ton of good points, there are a few problems with it. First, I don't know many people who seriously think that touring alone would be the new business model. Most people think that it's one component among a variety of new business models that are available. And, indeed, Schulz is good about mentioning some of the alternative additional business models out there. But, then he sort of ignores them in going back to discussing how touring alone isn't enough. It's sort of a nice strawman, but it's besides the point, since almost no one really believes that touring alone is the model. Then, there's the issue of extrapolating out from the existing "touring" market, most of which really looks at bigger tours, rather than at the market for local bands playing local shows. And, while he does include a discussion on making the live performance business "more productive," I'm not sure he really takes into account some of what's been happening -- such as the efforts Jonathan Coulton puts into building up a critical mass in a certain area before parachuting in for a live performance. The ability to do such things only will grow over time, and not enough attention is paid to them. In fact, we're already seeing live music bring in more money than recorded music
in some markets.
So, while it's a very good paper, and I agree with the overall strawman conclusion (touring alone isn't enough to replace the entire recording industry revenue), I'm not sure that's meaningful or really tells the full story. Touring does and will continue to work incredibly well for some bands, it will be a component of other bands' business models, and it won't be a part of others'. But there are plenty of different business models that can deal with that.