Back in the 60s and 70s record companies made a massive loss putting on tours. The venue hire, the crew costs, the lighting and catering and zillions of other parts that need paid for eat up all of the money made from tickets. However, the idea was that they'd make that back in album sales from the publicity and people remembering the spectacle of the shows when they played them. Piracy was restricted to physical media that degraded in quality as it was played, so it wasn't as hard to deal with.
These days albums are appearing on file sharing networks regularly before the paying public can actually get hold of them. Files are so small, connections are so fast, that it's so unbelievably easy to get pirated material and as such sales are diminishing. That's why there's not nearly as much cash to be made.
Merchandise and concerts are the way forward. That's why you're seeing people like Michael Jackson and Madonna start to appear on-stage for the first time in years. That's why you're seeing ticket prices rise. Few years ago you could get into a fairly small artist (like Thunder or Steve Vai) for about £12. Now you're talking nearly double that.
Now as an unsigned artist I have a bit of an advantage. When we record and release our album (later this year) it'll be small and independant. Nobody will know who we are. Costs to record will be fairly low, but 100% of our sales will be profit. We don't owe anyone anything. Of course that also means nobody knows who we are so sales will be small. We're not going to be able to give up our day jobs on the strength of sales at the concerts we play.
But a few months down the line maybe we'll have sold a few thousand albums. Maybe word will spread to people who don't go to our gigs but like our music. Maybe it'll extend outside of our friends of friends of friends network. They don't know us or care whether we spent a few grand to record and produce our work. They want the songs, they download the songs. Who makes money from that? Nobody. Their friends hear the songs and like the songs, they download the songs too, the way piracy goes.
So you have a potential audience of maybe a hundred thousand people or more, but have only actually sold a couple of thousand albums. Is that fair? It's easy to be cold towards bands who have been around for decades and live in mansions, but what about the new guys, the little guys? We don't benefit from the music we play. We might cover costs, but that's where it ends. That's why we need someone to watch out for us.
That said, to get back on-topic, videos are only done as promo material. You don't see nearly as many DVD videos of people are you did actual VHS so clearly it's a dying medium in terms of sales. Like promo singles. I believe that promo stuff should be free. You send it free to promoters so it should be free to the people you want to actually sell your stuff to. YouTube is just the new Top of the Pops or whatever other similar show you can think of. You can't put a price on that kind of thing.