Most small venues that cater to indie bands and singer-songwriters have a pretty informal financial arrangement with artists they host. Either there's a minimum guarantee or a door split or what have you. But the key is: no one has risked a ton of cash on the selling out of any particular gig. The result? All too often really talented musicians play in a bar to 4 or 5 friends and the bar staff.
Now there may be an solution on the horizaon in the form of something called: Ticketometer, which on the Kickstarter model, allows a musician to set a minimum # of tickets sold to trigger the actual performance. Here's some more detail from a recent post on springwise.com
Poorly attended concerts lose musicians and venues money and are disappointing for fans, but an innovative new ticketing service in the US, Ticketometer, hopes to eliminate the problem by guaranteeing artists play to a packed audience.
First the artist sets up their show on the site by entering the city, date, ticket price and then, most crucially, the “set-off point” — or minimum number of tickets needed to sell to make the show profitable. The artist promotes the show via their website and social media, and fans purchase tickets through Ticketometer. Once the set-off point is reached the artist is notified to reconfirm the event, and fans are charged. If the set-off point isn’t reached then the show is removed and fans fully refunded. Gauging interest before an event means musicians can create shows in cities or towns previously thought to be risky, and are in a better position to negotiate with venues. Venues benefit as pre-sold attendance guarantees business, and the concept is risk-free for fans. Though the current site is in beta, more functionality is being added with more connectivity to social media to benefit artists, venues and fans.