With physical album sales on a continuous decline, artist development -- especially in the touring world -- is more important now than it ever has been, a panelist of record label execs, managers, promoters and agents agreed today (Nov. 14) at the Billboard Touring Conference & Awards in New York.

Panel moderator Liana Farnham, VP of artist development at Columbia Records, said physical and digital product in the music industry is down 10%. And though tour support for artists is still only 4% of Columbia's total marketing costs, "the major labels still feel strongly about artist development and touring," Farnham said.

Jim Glancy, a partner with the Bowery Presents -- which books and promotes concerts at such New York venues as the Mercury Lounge, Bowery Ballroom, Terminal 5 and Webster Hall -- said the independent promoter helps grow acts by first booking them in smaller venues.

This year alone, Bowery Presents produced approximately 900 concerts between its New York venues, according to Glancy. And many of those artists have eventually graduated into larger facilities. "We're now seeing bands grow who can play at Summerstage and the Wamu Theater (at Madison Square Garden)," he said.

Asked what keeps an artist with a specific promoter, William Morris Agency's Rob Beckham, who books country acts Rascal Flatts and Brad Paisley, answered, "It all depends on the scenario. But you love to work with the local guys." But there should always be a tradeoff. "If I help you grow in the market, you should help me grow," he added.

When it comes to what start-up bands are looking for from labels, Bob McLynn with Crush Management, which represents Fall Out Boy, said it all comes down to support and "maybe a little money to buy a van." And while Michael McDonald of Mick Management/ATO Records (John Mayer) doesn't like taking tour support from labels, sometimes it's a necessity. But in the end, he noted, "you want to find people who believe in the band."

How important are radio shows to developing artists? "They're important, because the people going there aren't going to see them play at a normal club date," said The Agency Group's Nick Storch, who books Gym Class Heroes and Coheed & Cambria.

Along those lines, large festivals are also helping break new artists. If you put a developing act in front of a big headliner, there's one thing to remember, said Charles Attal, a partner with C3 (Lollapalooza, ACL Fest) -- it's all about delivering a memorable performance. If that happens, "the next show they'll play (in that market) could be 5,000-plus, Attal said.

But festivals aren't always ideal situations. While noting they can be helpful, Storch said the downside is that bands can't return to city for up to four months. In addition, fans might skip a club show because they "know they can see the band on Warped Tour" instead, the agent said.