Build a following, then record a CD
In the past it's really been the opposite way around. Of course, Seth Godin covered a story about a band that has built a name/brand for itself by touring and promoting itself without having recorded a CD. You can read the full text of the article here on the New York Times (note: you will have to register to access this story).
From the New York Times:
"The group's unlikely accomplishment will come to an end later this month, three and a half years after its first gig, when the four-piece group releases its first disc. . ."
". . . the surprising thing is that the Times (and the rest of the industry) think Particle's approach is new and novel."
I would have to agree with Seth, who's been saying that stuff like this is the new way of doing things. Is it really that hard to believe that you build an audience and then record a CD? I'll admit that it may seem to be little counterintuitive in this industry, but it's not a novel concept by any means, and new bands would do well to follow this example. I might argue that Particle had an easier go of it because the target audience of the jam-band music is more tolerant of this sort of approach, but I honestly believe that any band in any genre has the potential to pull something like this off.