Originally Posted by dairyairman
i've even heard that not only do bands not make money from cds, but they don't make money from ticket sales either. they say they make most of their money from merchandise sales. could that be true?
For some bands, yes.
It really depends on what kind of deals they have going.
As I mentioned, the Beatles signed away their publishing, because they didn't know better. The Who signed bad management deals, which for most of their career held them back from making as much money as other bands with similar sales. Plenty of other bands have fallen into similar traps. Or agree to outragoues marketing campaigns, of which their record company deducts the costs of from the bands royalties.
Other bands are fortunate to set themselves up in a way they only license out their albums to the record companies, and thus retain more of the sales.
Live, if the band is the opening act, they're usually paid a flat rate per show, from which they have to deduct their expenses. Some festivals, like Ozzfest, only pay the top acts, leaving the smaller bands to fend for themselves.
So, depending on things fall, it is possible for a band to sell records and tickets, but not make much money from either after the record company, managers, and lawyers take their cuts.