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Originally Posted by Nubus
People whom otherwise wouldn't have heard your music come see your shows and buy your limited-edition tour casettes.
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I think it's a safe bet to say that playing live makes a band or artist more money than recordings, period. And if you're not well known enough to make much money either way, then what do you care if somebody downloads your stuff? They check it out for free, dig it, and end up coming to your show and putting money in your pocket via cover charge or ticket sales. If you rock them hard enough, you can maybe even sell em a cd, shirt, and/or whatever else (in the case of one of my bands, you can sell them a Blasphemy Rock!). If they never downloaded your jams they'd have never walked through that bar door!
On a side note, it seems to me that, for small time and local scenesterizing bands, more albums are sold at a venue after a live performance than get sold at stores (or on websites, etc). At least, this seems to hold true for the bands I know personally, as well as for many bands I have been in. Dunno if that means anything but figured I'd toss it in there.