In the absence of significant income from album sales, artists can make a respectable living through touring and merchandising. This path isn't going to work for songwriters. They need to find a different funding model. Perhaps bill artists by the hour? Probably a flat-rate contract for x dollars per song would be more feasible.
That's 8,000 people who care enough to come out and see you. So let's say at least 100,000 people need to like you enough that they would at least consider buying the ticket.
$4000 dollars gross in ticket sales per night, 30% to the promoter. $2800 left. If you get 50% of that with 25% to each support act then after commissions to booking agent and manager you're left with maybe $950. You need to pay travel and accommodation costs out of that, and possibly a tour manager. For a four piece band plus tour manager you probably need $30 a head per diem for incidentals of living in the road. Add in food - another $30 per head and you've got $650 left. Hotel rooms aren't cheap. travel isn't cheap.
Sure you can sell 25 t-shirts a night at $20 each and make $15 a shirt. And throw in some CDs - maybe 30 at $10 a pop... you maybe net another $600 a night.
$1250 a day for your hotels and travel for 5 people - maybe you have $600 left after these costs. Oh and you have to pay your tour manager...
Each of the people in the band makes... what - $100 per show?
Can artists really make that respectable a living from touring and merch?
Sure, scale this up, play bigger venues - 2,000 capacity. But then your costs increase - people want a more impressive show, not just spit and sawdust. You need a set, lighting design, all the rest of it.