(breakingviews.com) -- For most rockers and aging hippies the 40th anniversary of Woodstock this weekend will mark a happy occasion.

Those who still can may recall love freely given, heads sprouting with muddy but flowing locks of hair and the notes of Jimi Hendrix's electric rendition of the "Star Spangled Banner". But for the rock and roll industry itself, the anniversary elicits more mixed sentiments.

That's because the music business currently finds itself in a sort of Alice in Wonderland version of the reality that emerged after the 1969 music festival. The three-day concert, which attracted more than 350,000 people, was actually a financial disaster. Yet through the subsequent release of a live album and an Oscar-winning documentary, Woodstock's architects were eventually able to make a profit.

Today, the economics of rock and roll are reversed. Yes, record music groups like Warner Music (WMG), EMI, Sony (SNE) and others still ply their trade by signing aspiring artists, convincing radio stations to play their tunes and then selling them in stores or on the web. But the spoils are increasingly accruing to those who handle the mechanics of concert tours and festivals like the one that took place four decades ago this weekend.

Consider the arithmetic of Woodstock. The event was organized by Woodstock Ventures, whose principals were Michael Lang, John Roberts, Joel Rosenman and Artie Kornfeld. For a ticket to all three days of the festival held on a farm in Bethel, New York, the promoters charged $18 in advance. When adjusted for inflation, that would be about $106 in today's dollars.

Now compare that to the price of admission to Bonnaroo, the jam-band festival held every June in Tennessee; or Coachella, the alternative music extravaganza that takes place in April near Palm Springs. Three-day passes cost $250 and $269 respectively. Moreover, both festivals attract rich sponsors, such as Budweiser, Heineken, AT&T (T, Fortune 500), Whole Foods (WFMI, Fortune 500) and others looking to hawk their wares to a hip clientele.

Famously, few of Woodstock's groupies actually paid to get in -- a tenth of them according to the event's promoters. And as many as 18,000 of those who did shell out for advance tickets were actually later given refunds because they were unable to reach the venue after the roads were closed to traffic. With the festival costing $3.4 million -- including Hendrix's relatively modest $18,000 fee -- Woodstock Ventures was in debt to the tune of $1.6 million after all the litter was picked up from Max Yasgur's farm.

And here's where the music industry, then entering its heyday, swooped in for the kill. Warner Brothers received exclusive distribution rights to the documentary Michael Wadleigh shot for just around $100,000. In exchange for the rights, the concert's promoters took a $1 million flat fee, plus a small take in the back end. Within a decade, the film took in over $50 million in worldwide box office receipts and Warner Brothers earned $16.4 million in rentals. It also won the 1970 Oscar for best documentary.

And then there was Woodstock, the album. A year after the festival, Atlantic Records, now a subsidiary of Warner Music, released a $14.98 three-record compilation, which sold more than two million copies that year and topped Billboard's pop album chart. A sequel released the following year instantly went platinum.

Concert-goers no longer clamor for slickly-produced documentations of their musical experiences. Why would they when they can record concerts on their cellular phones or their handheld Flip video cameras? They are all bootleggers now. And even those who'd rather enjoy a concert outside the lens of their telephones can find multiple versions of most events uploaded and broadcast for free on YouTube.

All of this has conspired to push more of the financial pie to the concert itself, a fact not lost on the industry. It explains why, for example, Warner Music has been acquiring stakes in companies like Australia's Peppermintblue Entertainment, which offers a wider array of services to artists than those traditionally peddled by labels.

It's also the reason Ticketmaster (TKTM) and Live Nation (LYV) are trying to merge, creating a vertically integrated promoter, ticketing service and artist management group. Of course, with economics gravitating to these parts of the rock business, it is also why legislators, rivals and even artists like Bruce Springsteen are amassing heavy opposition to the deal. So much for peace, love and rock and roll.