When you employ a freemium model, a small percentage of your customers will generate a significant part of your revenue. This is why you must offer expensive tickets and merchandise for these diehard fans.

Please read this article by Hany Nada on allthingsd:

Music for Nothing and the Fans for Free

This is why Bon Jovi can sell platinum tickets for exorbitant rates that include the chair you’re sitting in. There’s a demand for them.

This is the essence of Kickstarter. Your diehard fans will cough up enough money for you to record your album, just don’t expect the masses to care when it’s finally done.

This is a completely different paradigm from the old days, when everybody paid the same price for the album and the concert ticket. Now that the music is free, people will still buy it, if you give them a reason to. That’s one of the movers behind vinyl. It makes a great souvenir for a hard core fan. Oldsters have been going on forever about the visuals, they are correct. The music is free, what it’s packaged in is not. Stop decrying the theft of MP3s and wrap them in something your hard core fans want.