We started discussing his book Black Postcards, an enthralling, unsettling memoir of his unusual life in rock, and ended with how financial struggle can both inform and hamper the creative process.

Wareham's book, which appears in paperback this month, documents his critically acclaimed, financially uncertain career. There's an existential dilemma underlying Black Postcards: If the artists are struggling, and the labels are imploding, then why would anyone want to be a rock star? Because, Wareham told me, it's still a lot of fun.

Wareham, 45, grew up in New Zealand and Sydney before his family moved to Manhattan on his 14th birthday. As a student at Harvard, he founded Galaxie 500 (with drums borrowed from his classmate Conan O'Brien). It was an anti-rock band whose ghostly, somnolent daze beguiled critics and loyal fans.

After Galaxie, Wareham formed Luna, nodding to punk ancestors Television and the Velvet Underground in its own version of nocturnal New York. Today, he and his wife, former Luna bassist Britta Phillips, play as Dean & Britta, and he runs his own record label, Double Feature.

Q: In your early 20s, your relationship with your bandmates in Galaxie 500 soured slowly, then quickly. If you'd teamed up to start an internet company instead, might your partnership have survived?

A: If you form an internet company together, you still get to go home at the end of the day. You don't spend your life riding around in a van.

Q: You seem to consider bands highly fragile, like a cross between a troubled marriage and a troubled corporation. Yet fans must wonder: you get to hang out, travel, and do photo shoots instead of sitting at a desk -- why break up?

A: Bands are supposed to break up. It's part of the story. Though these days, it seems every band in the world is getting back together.

Q: But eventually, a band probably has to decide whether it can continue as a viable business. Could sellout crowds at Madison Square Garden have helped Galaxie 500 or Luna overlook any tensions?

A: Well, it doesn't have to be a viable business. Most musicians I know support themselves with some other kind of job. But there are certainly plenty of examples of bands whose members loathe each other but who continue because they're making big money. The Ramones went on for years with Johnny and Joey not speaking to each other; the Beach Boys would enter the stage from different sides.

Q: You've now led three acclaimed bands. Do you have a favorite song from each?

A: That changes day-to-day, but today it's "Tugboat" by Galaxie 500, "Tracy I Love You" by Luna, and "Ginger Snaps" by Dean & Britta.

Q: I love Luna's old song "Friendly Advice." My only quibble with it is that it's just six-and-a-half minutes long. I'd prefer a 20-minute version. I guess I would've made a lousy music executive.

A: I think it was eight minutes when we first tracked it, and we did an edit somewhere. Sterling Morrison of the Velvet Underground played the great guitar solo -- he suggested we make the edit.

Q: Black Postcards illustrates that two decades of critical acclaim and loyal fans don't necessarily translate into vast fortunes. The Stones get Gulfstreams and châteaux; Luna got smelly budget hotels, a beat-up Ford Econoline van, and rising piles of bills and laundry. Why does rock seem to be a glamorous line of work?

A: Well, it is glamorous, in certain situations. You're up there on stage, prancing around with nice electric guitars, going out partying after shows. But maybe things that seem glamorous when you're 20 years old look different when you're 40.

Q: When you were in your 20s, a music exec scolded you for wanting to make albums instead of wanting to be a household name. Would you caution a young musician today against recording?

A: If you want to make records, you should try to do that. It's a great feeling to make an album and get the finished product in your hand. So in one sense, it's its own reward. The problem today is people are not buying records or CDs they way they used to.

Q: But have musicians ever really been able to eke out a living by selling albums?

A: I've always thought that playing live is a tough way to make a living. But it's sure hard to make a living selling records too. If you figure a band is making about $2 for each CD that they sell, and they have to share that, it's only a small number of artists who really make money from record sales.

Q: At one point in your book, Luna's guitarist Sean Eden becomes incensed after arriving at the airport for a European tour and learning he won't be drawing a salary for the duration. For him, this presented a serious hardship. Were you ever living hand-to-mouth?

A: I lived hand-to-mouth in the early days of Galaxie 500, but that's what you do when you're 22. I read Ian Hunter's Diary of a Rock 'n' Roll Star, and he makes the point that everyone still has to pay their rent at home while they're out on the road. I haven't gotten rich like a real rock star, but I manage to make a living playing music, which is pretty cool.

Q: When you first encountered digital file sharing, in 2001, your reaction was to wonder, "What kind of idiot would go out and buy records now?" But did you worry that this technology would hurt your income?

A: I didn't think about it -- I thought it was only hurting Madonna and Metallica. But the truth is that it has brought the whole major label system to its knees, because they depended on those huge hits to run their labels and sign new bands.

Q: Music stores are disappearing as digital retailers like Apple's iTunes overtake them. Yet sales are still plummeting overall. Will we still be buying music in 10 years?

A: I will. I like to buy records. But the other thing to note is that although total sales continue to decline, every year there are more CDs released than there were the year before. And this has been going on for a long time. I also think compact discs are overpriced, and have been from the day they were introduced. Why should we have to pay $18 for a Beatles disc when they cost less than a dollar to make?

Q: Nearly every industry imaginable is gyrating: finance, cars, real estate, publishing. Can any flailing category draw lessons from the long-suffering music industry?

A: Isn't this the nature of capitalism -- deepening cycles of boom and bust? But the compact-disc business is faltering because of changes in technology; that can't be stopped. I have a friend who used to work at Sony Music, and he said he was struck on a recent trip to Massachusetts by seeing mansions built on whaling fortunes. People once made fortunes in whaling, but things changed. And so it is with compact discs.

Q: Do most musicians -- Prince aside -- encounter creative interference and resistance from nervous label accountants?

A: Well, if you own your own record company, you can do what you like. But if you're taking $100,000 from a major label to make your record, then you might expect that they'll be looking over your shoulder while you're working on it. Having said that, Luna was pretty much left alone when we were on Elektra. They never told us what to do. Ultimately, they made a business decision that they didn't want to keep spending money on us, which is fair enough.

Q: Is a musician's relationship with a label easier or tougher than a writer's with a publisher?

A: Recording contracts are worse than book contracts, because in the record business, they lump all your records together on one tab. With a book, it's a separate advance and a separate account each time. So if your first book "loses" the company $50,000, and your second one makes $60,000, they don't say, "Hey, we don't owe you these royalties, because you still owe us from the first book."

Q: Your memoir explores therapy: psychotherapy, couples' therapy, band therapy. If you were starting a business venture, would you hire a therapist for you and your partners?

A: Not right away. Therapy is just for when things get difficult.

Q: Did your labels ever offer you benefits, like health care?

A: Hell, no.

Q: Then what does a musician do for insurance?

A: An American musician generally goes without health insurance. But talk to a Canadian band -- they have health insurance. And I have French musician friends who get paid unemployment benefits by the government. I know Thomas Friedman likes to write about how messed up the French system is, with their high wages and shorter work weeks and generous benefits, but it sure looks good to me.

Q: Ah, so that's why France has so many legendary rock stars. Has the music-business model irrevocably drifted toward selling concert tickets instead of recordings?

A: Yes, it has. It used to be that the big labels would give you tour support to help you out there on the road, because your touring activity was helping to publicize and sell your CD. Now the labels are looking at those ticket (and T-shirt) sales, and trying to get a cut of that too. The other increasingly important aspect is licensing songs to films and TV commercials.

Q: Is this the best or worst possible time in history to break into the music business?

A: I guess it must be the worst. But I just started a record company -- somebody has to do it. You do it because you hear something you love, and you want other people to know about it. At least that's why I got into it.

Dean Wareham's Black Postcards: A Memoir (Penguin, $16) is now out in paperback.