The economics of music are fucked on every level. While this article focuses on national and mainstream acts, for no-name and upcoming artists it's even worse, and when they do make money it's basically voodoo.

I play in a band in a scene where there just are no paid gigs for us. Metal/hardcore is not the kind of music where you can play a restaurant and draw people, play weddings, cafes, busk or anything like that, so there's no one wanting to throw money at you. At best we play for free beer and make up our costs by pushing merch. There is a scene here though, and you can get people to come out. But even at an event that gets decent turnout and the promoter is charging $5+ at the door, it's not like you're going to see any of that cash. Presumably it goes to venue rental fees, promoters' pockets, and that's $5 that people are less likely to spend on a shirt inside the show. There is no trickle-down economy in my scene.

I do know that there are acts that do regularly get paid though, or styles where it's expected that money will come in eventually. Bands are businesses. Even our unprofitable one we treat very seriously as a business. A cover band can expect to be hired to play gigs at bars, restaurants, weddings, what-have-you. I hear talk from many people in such bands that they would not even consider playing for below a certain sum of money. And yet, I look at some of these acts and I don't see them making any more economic sense than what is in my scene. These same people that won't play for less than $300 a night complain about bar doormen counting their pull, or being forced to drag friends and family out to the venue to see their show (something we regularly do which is the vital force of our shows). If there were religious bookkeeping on those numbers I doubt that many of these paid acts would actually draw more cashflow into a venue than the bands in my scene. There's a whole discussion on a musician's board (who play these paid gigs) about how none of them would go out to see a cover band.

If I were a restaurant owner, I'd be very skeptical that any band playing my dining room would be worth $300+. They'd have to pull in more than that much in sales by their presence, and I don't think many bands can do that. I don't know a lot of people that would just walk into a bar/restaurant just because live music is there. Yet there is still pay out there for it. On the other hand I know my band has moved more than a grand for shows in tickets and merch. There's no logic being applied in the economics of local music. It's utter ridiculousness.