I believe you are dead on it, Jed. The venue also has a lot to do with it, which ties into both of your points. I have found that when we are playing a venue that is not conducive to the performer being able to capture the crowd, sales suffer. For example, one Festival we play has a main stage and a number of smaller stages. When we play the main stage, which is physically removed from the crowd (above them and separated by a small fence), surrounded by the market tents, we sell far fewer CD's than when we play the "pub" tent, or the satellite stages. I believe it is because there are fewer distractions and we have the ability to capture the audience much better.

All the best,

Mick