No doubt it depends on the band in part and in part on whether they record as a group performing simultaneously or individually with each member laying down his/her tracks solo.
I know Pete Townshend always recorded demos (and in fact has released many after The Who has recorded and released their versions). It's instructive to me to see where the band hewed to Pete's original concept and where each band member's individual expertise took the song into previously uncharted waters.
I've read that David Bowie went into the studio with very little of the finished songs and for him it was the studio enviornment and the studio experience where the songs came together. I don't think he had enough for demos before that (expensive) process began.
I also think about Pink Floyd and the Grateful Dead. Two groups as different as could possibly be. Makes me wonder how each survived their particular studio experiences.
OTOH wasn't Springsteen's Nebraska originally just a demo on a cassette he carried around in his jeans pocket before he finally decided those were the songs he was going to release as is? Cannot argue with spontaneity.
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