I know almost nothing about the music business, but I have always heard that artists make more money touring than by selling albums. If that were the case, I would think that artists would jump at the chance to be played widely in hopes that it would drive consumers to buy tickets for their tours.
It seems like two of the arguments (no ownership of the music, no direct compensation for artists) could be made for radio in the earlier portion of the 20th century, yet that vehicle was apparently successful for both the radio stations and the artists.
I'm not an expert or industry insider so take the following lightly.
The reason why they make more money on tour is because of how the current music industry contracts are set up. The music industry take a massive cut of record sales leaving the artist with very little. Also, when recording an album, an artist gets an advance from their label to pay for the studio, the sound engineers, etc. This advance is paid back through their royalties before they ever see a cheque from the label. As you can imagine the cost of a professional cd recording is quite high. The combination of a small cut + reimbursement makes it so that most bands never see a cent from cd sales and make it up with touring and merchandise sales.
This however is changing and not in a good way. Increasingly, labels are forcing artists into what's commonly reffered to as a "360 deal" which gives a cut of everything to the label. CD sales, touring, merchandise, etc, the label gets a cut of it all.
If it's true that touring is more profitable then I'd really like to see data for this, and a comparison between famous and little-known acts. This could add a lot of weight to arguments in favour of laxer copyright laws.
Honestly, it depends on how many albums the artist actually sells VS how large of a draw you are(there is a correlation between both).
Say for example an artist makes 1.35/album and sells 2 million(which is not too bad) and then does 100 shows (which certainly is not out of the realm of possibility)commands 40k fee + merch sales at the venue.
1.35/album * 2,000,000 = 2.7 million
100 shows * 40k = 4 Million + merch sales - costs
So it really depends, the more albums you sell the more money you make from albums. The less albums you sell but the more you tour, so for a middle tier artist who generally doesn't sell an obscene amount of albums but does a lot of gigs, they would certainly make more touring.
Someone like U2, probably makes more from album sales.
"1.35/album * 2,000,000 = 2.7 million"
It should be noted that especially new artists often start getting royalties after the costs of making the record and music videos have been paid. I believe that is a big reason why many one-hit wonders might sell millions world wide and go broke soon after the success fades.
It seems like two of the arguments (no ownership of the music, no direct compensation for artists) could be made for radio in the earlier portion of the 20th century, yet that vehicle was apparently successful for both the radio stations and the artists.