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From what I've seen on various documentaries and such (and I'm trying to remember so if I get something wrong, blame my head and not my heart), when an artist is signed, they get a loan of sorts. Then, all of the promotions and outfits and everything come from the promise of record sales. If the album sales, then it's all good. If the album flops, or doesn't make enough to cover cost, the artist could be #1 on Billboard and still broke. Bad record deals make the company rich and the artist suffers. That's why the real money is in concerts.