An enormous reason the record industry is struggling and bands are breaking up is because they simply can't afford to continue making music. This is becoming startlingly and increasingly clear as the impending recession looms over the United States.
Let's look at this from an economic (and logical) perspective. I have gratuitously simplified this as best as I could:
Soaring gas prices make it difficult for smaller bands to tour. Without record label stipends that major label acts usually have, up and coming and indie bands have to fend for themselves. If you're wondering why so many musicians are so skinny, it's usually because they have to choose between playing the next town's show or eating dinner.
On the flip side, skyrocketing fuel costs also mean that less fans may be willing or able to see their favorite band a state or two over. If that band doesn't come to their immediate area, they might have to sit the shows out. Poor turnout rates mean the band may not come to that area again for a while. It's a truly vicious cycle.
In addition, during recessions, people generally have less spending money--not to mention less jobs. As a result, ticket sales for smaller tours can suffer, especially with the gross inflation not only of the American dollar, but of ticket prices from brokers.
Touring, licensing, and merch sales are where bands make most of the money that they can keep. An enormous chunk of merch sales are made at shows while a band is touring. If a band can't tour, they can't do much else to promote their albums (most things outside of shows are controlled by their publicists--Joelle and I know all about this!). If their CD doesn't sell, the band's label makes no money and the band gets dropped. The band is back at square one, with big dreams and small funds... And no gas money to tour. It's a truly vicious cycle.
With no bands touring, venues have no bands to showcase and no revenue to take in. Venues close. Bands have nowhere to play when they do tour. It's a truly vicious cycle.
What are some possible remedies for this?
For fans: Do whatever you need to do. Babysit. Shovel snow. Mow grass. Hell, if you're in Vegas where it's legal, turn tricks (kidding, mostly). Take a break from taking pictures of yourselves in your skivvies for attention and do whatever work you can to earn whatever cash you can. Save your dough and see your bands. Buy their albums, whether on iTunes or at Best Buy or, preferably, at your local independent ("Mom and Pop") music outlet.
For venues: Sell tickets independently, without outside brokers. "Brokers" leave fans just that: broke. The more expensive a ticket is, the fewer bottles of five dollar water the kids will be able to afford once they're inside. And really, convenience charges? For what?
For labels: Give bands more time to develop fan bases before dropping them like they're hot. Market to niches, not demographics. Have more faith in your artists. And for the love of Elvis, pick better singles.
For artists: Read the fine print. Keep on keeping on.
For everyone: Break the fucking cycle.
*By Jess, who isn't usually this good with numbers.