Once Again, Concert Business Sets New Records

from the well,-look-at-that... dept

While people who keep thinking that the "recording industry" is actually the "music industry" keep insisting that the business is in serious trouble, plenty of evidence of the actual market suggests this is a great time to be in the "music business." More musicians are making and distributing music than at any time in the past thanks to much cheaper means of production and distribution. And, as Rose M. Welch points out, the concert business continues to thrive, setting new records yet again. Last year we noted that 2007 was the best ever year for the live music business, and it appears that 2008 surpassed 2007 by 13%, even in the midst of one of the biggest economic downturns most of us have ever lived through. There is some concern about how the economy will impact 2009, but even if concerts decrease next year, it will be because of the overall economy, not because of any problem with "internet piracy," which has actually done plenty to help drive larger audiences to concerts by increasing the fanbases of many musicians.


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  1.  
    identicon
    Anonymous Coward, Dec 30th, 2008 @ 6:31am

    This doesn't seem to solve the basic problem : the increased difficulty for musicians to make a living out of music.
    Clearly some people are still making piles of money but that doesn't mean the music industry is healthy.

     

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  2.  
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    Anonymous Coward, Dec 30th, 2008 @ 6:38am

    It may not indicate the industry is healthy, but it certainly doesn't indicate that its about to keel over as a result of piracy either.

     

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  3.  
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    Anonymous Coward, Dec 30th, 2008 @ 7:01am

    Re:

    the increased difficulty for musicians to make a living out of music.


    I'd be interested in having a read through all that evidence you have showing the increased difficulty musicians are facing.


    Clearly some people are still making piles of money but that doesn't mean the music industry is healthy


    While your at it I'll take a look at the evidence showing the music industry isn't healthy and thriving.

    Thanks.

     

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  4.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 7:20am

    . . .

    Of the thousands / millions of bands out there; I wonder how many are actually making money off touring. Touring has traditionally been viewed as a "loss leader" in order to sell CDs. The article doesn't state how much of that goes to actual musicians.

    If Dave Matthews Band adds another couple of tour dates; they easily bring in ten million or more.

    The band you saw at Joe's Bar last Friday is lucky to leave there w/ $300 (split 5 ways)

     

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  5.  
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    Matt, Dec 30th, 2008 @ 7:31am

    Re: . . .

    How many make money out of touring?
    How about all. Small independent artists can easily make a living off touring. Large artists make a killing off touring.
    Touring is not a loss leader, CD's are the loss leader.

    Artist makes: 7c/cd split between all the members (so figure, 10 members or so with divvying splits?)

    CD sells: 10 million copies, recording industry walks away with about 8 million bucks. the artists? About 50grand-70 grand a piece.

    Meanwhile, touring. 1000 tickets at 20$/piece? Artists split it with the place hosting the concert for 10$/ticket. We're talking a grand in cash for doing 1 night's performance, even if you're a lowly and not well known artist. Make this concerts for 40-50$ a piece and sell 20, 30 thousand and the only person who doesn't make much is the recording industry and rightfully so. It's the artist's contribution not the industry in that case.

     

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  6.  
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    Anonymous Coward, Dec 30th, 2008 @ 7:39am

    Re: . . .

    concerts and touring is only considered a loss leader by the record industry who doesn't profit from them. the artists get a portion of all ticket sales, plus all the merchandise sales that happen at concerts (many first-time listeners will buy merchandise specifically so the band can sign it).

    and doing a gig at a pub does not equal a concert or touring.

     

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  7.  
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    OneDisciple, Dec 30th, 2008 @ 7:47am

    Evidence

    Could someone show me where the evidence is hidden that says artists of any kind deserve to make millions of dollars, because they are artists, while I get to make barely enough to feed my family working 60 hours a week.

     

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  8.  
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    Anonymous Coward, Dec 30th, 2008 @ 7:57am

    "The band you saw at Joe's Bar last Friday is lucky to leave there w/ $300 (split 5 ways)"

    Then maybe they don't deserve to live off music. Just a thought...

    HEY, I CAN PLAY MUSIC! PAY ME!!!!!!

     

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  9.  
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    suzerain, Dec 30th, 2008 @ 8:11am

    Re: Evidence

    It is not hidden. More people are willing to pay them for what they do than are willing to pay you for what you do. They are high in demand while, I can only assume, that you are not. Supply and Demand can be a bitch.

     

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  10.  
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    OneDisciple, Dec 30th, 2008 @ 8:15am

    Re: Re: Evidence

    Or is it that the government on behalf of the entertainment industry has passed laws to force the public to pay them.

     

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  11.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 8:23am

    Re: Re: . . .

    On CD Sales:
    An independent artist is not on a label and therefore a CD sale is all profit. They make $10 or $15 or whatever they can charge. They do have to pay the upfront cost of CD production. It is unlikely in this scenario that they'll sell 10 million copies, though.

    On your touring numbers:
    How many independent bands sell 1000 tickets a night?

    Of the two 1000 people+ venues in CT that book independent / original bands; the bands get paid based on ticket sales.

    At one venue; the band gets $1 dollar for every ticket after 50 of theirs that comes through the door. So, if they get 100 people through the door; make $50.

    With the other venue; the band has to buy 50 tickets @ $10 a piece to get booked. This is a pay to play contract. If the band can sell those tickets, they'll make the money back. IF they cal sell more tickets; they make even more money. Otherwise the show is a complete loss. The band with the least ticket sales plays first; and the band with the most ticket sales plays last.

    I'd love to see a source for your claim that bands split the ticket price with the venue.

    I suppose I will caveat this with the fact that I stopped being in a gigging band about four years ago. However I doubt things have changed in the past four years as much as you claim.

     

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  12.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 8:26am

    Re: Re: . . .

    Many independent / new bands tour small venues; such as pubs, coffeehouses, art spaces, and anyone who will book them.

     

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  13.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 8:29am

    Re:

    I don't know how to judge who is--or is not--deserving to make a living off music. I'd say the guy in the pub working his arse off is probably more deserving than corporate manufactured pop such as the Jonas Brothers.

    But, every band [every business] I've ever known has started somewhere with the intent on growing.

     

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  14.  
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    hegemon13, Dec 30th, 2008 @ 9:09am

    Re: . . .

    It could as easily be said: "Of the thousands/millions of bands out there, I wonder how many are actually making money off CDs." Or, more accurately, I wonder how many are making a living by playing music, period. Not very many, percentage-wise, which is nothing new. Like all the arts, only a small percentage can actually make a living performing/creating their art. For the rest, it is basically a hobby.

    For example, take a look at the statistics for fiction authors. Even among published authors, only a small percentage are able to make their living off of writing alone. Take it out of all those who write fiction, but have yet to be published (the equivalent of the local band at Joe's Bar who have no label-released or widely-released CDs), and you are looking at a fraction of a percent.

    If you think every artist deserves to be rich, then you need to wake up to the real world.

     

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  15.  
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    hegemon13, Dec 30th, 2008 @ 9:14am

    Re: Re: Re: . . .

    Then they are building their business. Like all businesses, there is a period of loss before they start to turn a profit. Some may never turn a profit, just like 9/10 businesses fail in the first year.

     

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  16.  
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    Anonymous Coward, Dec 30th, 2008 @ 9:20am

    Re: Re: Re: . . .

    I applaud the fact that (if I can take you at your word) you were in a band and gave it a go; that's pretty gutsy stuff when you think about it.

    At the same time, I might wonder what you guys did to promote yourselves. As noted elsewhere, doing a gig in a pub isn't the same as touring; it's a nice first step, but as you note it won't pay the bills. The ideas presented on this site talk about self-promotion and then selling tickets to the show, so that (1) it's you they're coming to see (as opposed to being background added onto an already-successful business) and (2) you can get lots of them interested in coming to see you. Having hardcore fans in much different than having some people show up at a pub the night you're playing.

    The Big Boys 'make it' because they get a lot of exposure and gain a lot of fans. The little guys need to do likewise, and the Internet can go a long way toward that end, and much more cheaply than signing with a Lable.

     

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  17.  
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    hegemon13, Dec 30th, 2008 @ 9:21am

    Re: Re: Re: . . .

    Um, neither of these seem like a problem to me. They are unproven bands renting performance space from the venue. Saying the venue should pay them up front to perform is like saying a commercial landlord should pay a business for using their building. Or, for a closer analogy, it is like saying a fair should pay vendors to sell stuff in their booths.

    A band is a business, pure and simple. If you want to make money, you have to work hard, invest capital, promote/advertise, build an audience, and slowly work your way up. If you do everything right, you just MIGHT succeed, just like any other business. Why do you think bands should get some kind of special handout or exception?

     

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  18.  
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    Anonymous Coward, Dec 30th, 2008 @ 9:22am

    Re: Re: . . .

    Your last line gets to my main point: of the thousands/millions of bands out there, how many are selling anything that anyone wants to buy?

     

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  19.  
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    Peavey, Dec 30th, 2008 @ 9:42am

    concerts

    We're all going to more concerts because we saved so much money pirating music! :)

     

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  20.  
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    kirillian (profile), Dec 30th, 2008 @ 9:57am

    Deserving of payment?!?!?!

    Since when does ANY person DESERVE money?!? You get paid for your 60 hours a week because you and your boss have worked out something of mutual benefit to both of you - your job. If your boss is dissatisfied with you, you get fired. End of story. No one cries (except you) and no one else cares.

    Good bands/artists succeed because the public gives them good evaluations. These bands eventually get paid through whatever their individual business model is. There is mutual benefit involved. If a band sucks, then they might get cut by their record label, or, if they are indie, they might not be able to book venues anymore. Either way, they get FIRED.

    Since when do ANY of these musicians DESERVE to get paid?!? I'll pay if I like them. And there is NO record label that can tell me who I like...that happens to be MY call.

    I'm a musician myself. I realize that I am only going to be paid if I can make the audience WANT my music, want some merchandise, want me to perform...Why in the freaking world do these IDIOTS not get this?! Dump them in the streets and let them EARN their pay. Stop bottle-feeding them.

    For those that have earned their pay in the past and are struggling now, "Get over it!" It happens to anyone with any kind of job. No one gets paid simply because they once did some good work...that kind of attitude is ridiculous...it doesn't matter if you have seen some people getting away with it...you can't expect to ALSO be able to EXTORT people...danged greedy bastards...

     

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  21.  
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    Anonymous Coward, Dec 30th, 2008 @ 10:02am

    Re: concerts

    Speak for yourself. I suppose I'm able to go to more concerts because I am able to buy only the music I want to hear.

    Further explained, the days of buying a $15 CD for one or two songs are long gone.

     

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  22.  
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    Anonymous Coward, Dec 30th, 2008 @ 11:05am

    Re: Deserving of payment?!?!?!

    To pay devil's advocate... if the audience WANTS your music, but they can get it cheaper (free) without going to you directly, presuming that your individual business model is "sell music recordings," wouldn't you feel you 'deserved' money from all those people 'stealing' your music?

     

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  23.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 11:07am

    Re: Re: Re: Re: . . .

    I didn't mean to insinuate either situation was a problem. It is up to the band [aka business] to decide whether it is a good deal for that band [or not].

    I just meant to say that bands are not necessarily making lots of money from gigging / touring.

     

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  24.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 11:13am

    Re: Re: Re: Re: . . .

    The missteps 'we' made as band in terms of self-promotion could fill multiple books. I'm smarter now in that area; but am devoting my efforts to other non-musical expenditures.

    The low cost of recording technology makes it easy to create good quality recordings. The Internet makes it easy to make those recordings available at low cost.

    Neither of those things lead to exposure, however. They only lead to the possibility of exposure. Just having songs on the Internet is just a small portion of being a successful musician.

     

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  25.  
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    Jeffry Houser (profile), Dec 30th, 2008 @ 11:18am

    Re: Re: . . .

    My only comment is that I'm not sure where I said I thought that every artist deserves to be rich.

     

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  26.  
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    Anonymous Coward, Dec 30th, 2008 @ 11:47am

    Re: Re: Deserving of payment?!?!?!

    ...presuming that your individual business model is "sell music recordings,..."
    If that's your business model then you should probably change it as that's a bad business model for most. A bad business model is your own fault, economically.
    ...wouldn't you feel you 'deserved' money from all those people 'stealing' your music?
    What do "feelings" have to do with market economics? That's a personal problem.

     

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  27.  
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    Anon2, Dec 30th, 2008 @ 12:54pm

    facts

    This is a very good post, though don't put too much stock in the overall, worldwide figures -- bands that play to 10,000 to 20,000 here in the US sell out stadiums in the rest of the world, where concerts are not as common, so overseas grosses skew the figures. And the aggregate figures, both worldwide and North America, are heavily skewed by a very small number of HUGE tours. The fact is that in general, the live music sector is holding its own, certainly doing far better than recorded music sales, but it is hardly "thriving."

    But the general thrust of the post, and the comments, come pretty close to hitting the nail on the head. I've worked on and off for years (decades) with artists, and people who work with the artists, in a secter of the industry that literally paved the way for all the innovations that are now being slowly adopted industry-wide; from giving out free music and letting fans tape and circulate live performances, to selling tickets directly to fans, to having to make it on touring because these kinds of bands (jambands) have never sold many records/CDs. Even the Grateful Dead, for years the biggest touring act in the US, never really sold any consequential number of albums. Yet they managed, through luck and pluck and stubborn refusal to follow the industry's "rules," figured it all out and were extraordinarily successful (for a band of hippies, anyway), as have many bands that have followed their lead.

    There are some real factual inaccuracies -- just plain making it up, actually -- in some of the comments. First, only established bands with reasonably predictable and substantial ticket sales can command guarantees (up front payments), and even they are still dependent on ticket sales to make their nut. Only the biggest fifty or so touring bands can command big enough guarantees that they are not necessarily impacted by market-to-market ticket sales; most, even at the 1,000+ venue levels, are paid a modest guarantee against a percentage of the gross. This is actually good, it incentivizes the band to do its part (often more) to promote each and every show.

    Most bands, however, are at the other end of the spectrum. Somebody up there observed that Joe's pub is not touring. Wrong. Every band starting out must tour before they can break free of playing the Joe's pub in all but their home and eventually regional markets. Working your way up from Joe's pub to a 200+ venue in your home town literally gets you nowhere. It's just the way it is. I've worked with bands who truly understood this, and were prepared for the rigors of touring 150-200 nights a year, living in their van or peoples' sofas/floors, and the ones who get it learn pretty quickly either how to do all the ancillary stuff (promoting themselves, made much easier with the internet; recruiting street teams; hawking CDs at shows; etc.), or they bring on board someone who can. And they very slowly, painfully, grow their fanbase, first in this market or that one, then in surrounding regions, and if they are truly good, eventually in enough markets around the US to begin to emerge on the radar.

    But the dollars being tossed around in some of these comments are just absurd. It takes years and years before a band can play to 1,000 people, even in their home market. Most don't ever get that far; most in fact don't ever play to more than a couple hundred people in their hometown and eventually they give up. Which is fine, the "market" of music fans really does sort the wheat from the chaff, though a lot of truly genius musicians get left in the wake, finding other ways to earn a living, while pursuing their art with whatever energy they can muster simply because they are driven to do it. Same as it ever was, for painters, and sculpters, writers and poets, and musicians -- most of whom are, most of the time, happy just making their art and managing to feed and clothe themselves. Great art gets made anyway, because talented, genius artists are motivated by something that transcends dollars. The starving artist is not just urban legend, it's the way things have been forever.

    The typical deal for a band just starting out is a bad one, though a decent manager can sometimes push for a bit better: after the first $100-$200 or so in door money, the band gets 50%. And only of the door; they get zero from the bar, or kitchen. And they have to give up 15% or more of their merch sales to the venue/promoter. They are not -- as someone up there asserted -- "renting" the venue. The venue is the venue, and either it or someone else is the promoter, and the band is just the band. They aren't renting anything. Well, for the most part. Most small bands are charged not only for some/all of the costs of promotion, but they may be charged a fee for some of the staff as well -- front of house engineer, lighting director, etc. It's really not fair given that the house keeps all the bar/food, deducts promotion costs, and keeps half of the door, but they do own or control access to the venue, the bands need them as much if not more than they need any particular baby band, and again some bands are better than others at haggling.

    But the fact is, until a band can consistently sell a couple hundred tickets a night in at least ten or twelve markets -- and really it needs to be more -- they will not see more than a couple bucks by the time they get home. And bands that can't get past that level will eventually fade away; you need to break out across the country, hitting dozens of markets at a consistent 200+ tickets per night, and deliver 400+ in at least 4-5 home/regional markets, before you are worth anything at all. Booking agents won't bother with you; good managers won't return your calls; even small labels won't be interested unless you fill a very special niche; and you probably need a day job off the road to make ends meet (unless you have a generous girlfriend/boyfriend who is willing to carry you).

    More math: a five piece band, touring with all their gear, and minimal support (one or two people to help load in and load out, sell merch during the show, deal with all the things that need to be dealt with so the artists can focus on preparing for and delivering a great performance), means seven mouths to feed, a huge van with a trailer for gear, hotel rooms (3-4), gas, insurance coverage for the vehicle, trailer, gear and people, costs of promotional materials and shipping them to street teams, costs of comp tix for people who have helped you in any way (or who might), because there is no such thing anymore as truly free comp tix from the venue/promoter, and other costs.

    Then there are the off-the-road costs. Fanbase management is not free unless you are truly doing things primitively. You need to use high quality services for email list management, email design and setup, not to mention access to large email lists of people more likely to be into your music. It costs money to record, even if you are setting up in someone's home and mixing/mastering with Protools, because decent gear is very, very expensive, and it's not cheap to rent either. Musicans have to buy expensive instruments, effects, and all the other gear necessary to do what they do

    It all adds up to very significant dollars. And no sane person is going to invest in a band at that level. First, you tour; then you build fanbase; then, if you ever get to the right level, you might be able to attract some money, but that's an extreme rarity. Labels, especially independent labels, don't front any money whatsoever, and even a well-negotiated deal allows them to recoup whatever they have invested before the musician is entitled to a split. And, as this blog is fond of reminding everyone, there's very little money to be made selling recorded music anymore unless you are very big, or offer something special -- value added product -- while you are giving away loads of music for free to promote yourself.

    Bottom line: for a five piece band, unless you are grossing $2500 or more per night, you will not end up with much for the bandmembers to split at the end of the tour. And it is just positively absurd to assert that the band should just charge $40-$50 instead of the $20 -- or more realistically, $10-$15 -- that is being charged. You won't build up any fanbase at all that way. And until you are grossing $5k to $10k per night, you likely won't be making much of a living off your music, either.

    Gotta get to $20k or more per night before you can even buy your first house -- and twice that before anyone would consider you even modestly successful.

    Not whining here; it's the way it is, and as it should be. But people here have such a warped perspective, make up so many things, that I figured a long comment with some actual reality in it might be interesting to one or two of you. I've worked with baby bands, and bands selling 15,000 to 25,000 tickets a night, and there's no way to predict which baby band will become the next band filling large theaters and amphitheaters or even arenas. It's lots of hard work, dedication to the craft, surrounding yourself with hard working, bright, savvy, experienced people, putting in the many years, being truly incredible at what you do so that you consistently blow peoples' minds every night you play, elevating the buzz to higher and higher levels, and a very significant amount of luck.

    But in the meantime if you are an artist, the healthy way to look at it is that you are playing your music every night, and perhaps only having to wait tables or work construction or whatever for a couple months here or there before you hit the road again. What a life!

     

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  28.  
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    Lonnie E. Holder, Dec 30th, 2008 @ 1:03pm

    Re: Re: . . .

    I think Matt has it right, sort of.

    Once upon a time, touring was for promotion of CD's. However, it seems to me that CD's make less and less money. However, artists, particularly big artists, make fortunes on touring. Indeed, if you look at the artists who make the most money in a year, they are also typically artists who tour regularly.

    There is a down side from this move from CD's to touring. These artists are making fewer CD's, if any. I am unsure of where this is going, but my current guess is that eventually there will be promo music that goes to the radio, and touring artists. Recorded music as a selling item, except for 99 cent downloads, may well eventually disappear, a victim of the digital age.

    Or, it may not. One of the problems with digital music is that MP3's may be convenient and easy to copy, but they do not have the quality of a CD, particularly when played on a good quality stereo. CD's may yet make a resurgence when people realize that MP3's are great when listening to Brittany Spears, but Pink Floyd, Bach and The Moody Blues require maximum fidelity and a real stereo with real bass speakers to be fully appreciated.

     

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  29.  
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    Rose M. Welch, Dec 30th, 2008 @ 11:07pm

    Re: . . .

    Says who? Please cite sources.

    Lyle Lovett says he's never made one red cent from album sales. His only profit was from touring. Madge just pulled down over $150 million from LiveNation for her tour. I could keep going...

     

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  30.  
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    Rose M. Welch, Dec 30th, 2008 @ 11:16pm

    Re: Re: Re: Re: Re: . . .

    Bands aren't necessarily making lots of money from CD sales, either, which is what you stated in your original post.

    I think what you're saying now (please correct me if I've gotten it wrong) is that not all artists can make a living from touring, and that they need proper promotion, which I agree with... However, you can take the word 'touring' out of that sentence and replace it with 'CD sales', because you're not going to sell any of those without proper promotion and exposure either.

    The labels provided, amongst other things, promotion. Nowadays, promotion and the aforementioned 'other things' can be had better and cheaper by using newer sources, such as the Internet.

    In the end, the artist can retain ownership of their music and make their own choices about what they want to do with it and what models they choose to use to make a living with. They will no longer be stuck in the RIAA rut that the labels are so desperately trying to keep them in.

    Everyone acts like we want to take the right to make choices about their music away from artists when, in reality, we'd like to empower artists and their fans with more rights and choices.

    I mean, really.

    Think about it.

     

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  31.  
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    Anonymous Coward, Dec 31st, 2008 @ 4:50am

    Re: Re: Re: Re: Re: . . .

    I readily concede that you can't put up a few mp3s on MySpace then sick back and expect the money to come rolling in. But a big part of making a band work is exposure, and The Internet (and other technologies) can help get you exposure cheaply. Once upon a time, Labels did that for you. That's all I was really pointing out. The Internet (and other technologies) replace the Labels.

     

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