[vizeroth]

A prospective band that caught their attention and was willing to sign the contract received: - an advance - studio time, advertising, packaging, etc. at whatever rate the label charged them - maybe help with touring, while paying whatever rates the label charged them

If they were really lucky/good/smart, they weren't in debt to the label when it came time to negotiate a new contract. Then they could hire a decent contract lawyer and get something more than 2 cents an album (before paying back that advance), build their own studio, etc.

Most of those "rock star persona"s have stories of what their lives were like before they signed those contracts. Some of them have some pretty interesting stories of what their lives were like after they signed them, too. Very few of them would believe that major record labels were taking a lot of risks with their money.

If the money has dried up at all, it's simply because the industry has become less predictable/more fragmented. Minor labels have become bigger than ever, and the majors are letting them take the risks (or leverage market expertise to gain a profit where the majors could not).

On the up-side, the costs of making a decent demo (or even album) and distributing it to an international audience are lower than ever, making it much easier for bands to do all of the things rock bands always had to do if they wanted a label rep to show up with a contract and an advance.