Whenever we discuss examples of successful bands who utilize live shows as part of their business model, or when we point to data about how live revenue is growing, people often focus just on the data available for "big concerts" in arenas and amphitheaters. For example, last year, we wrote about a research paper claiming that live revenue
couldn't replace recorded music sales revenue. While an interesting bit of research, there were a few problems with it. First, we certainly have never claimed that live alone is the business model for musicians. Live is one component that seems to work well for many, but most of the business models we talk about involve a variety of revenue streams. Second, as we've shown recently, the "recorded music" revenue tends to go almost entirely to the record label
, not the artist. So, from an artist's perspective, they're usually not "replacing" very much. But, most importantly, the data itself seemed to only focus on giant concerts: the kind that plays at arenas and amphitheaters. This sort of data is out there, but it's not everything. Yet, with various reports of financial problems at Live Nation
, some critics are rushing around to claim that all the folks who said "live" would "replace" recorded music revenue were clearly wrong. In fact, we've had one critic submit about 30 such stories.
But, of course, while Live Nation has something of a death grip on arenas and amphitheaters, that's not how most musicians play live. Ian Rogers
points us to a wide-ranging, but quite interesting, interview with indie band booking king Tom Windish
, where he notes that in the realm he's working in, things are fantastic. It's in the middle of the interview, where he's asked about whether the business is "hurting":
Are promoters hurting this year?
We're not. It seems that Live Nation is. I don't really pay attention to the side of the business that is arena or amphitheatre driven. People are excited about seeing a lot of our bands. I hope more of them get popular. That would be great.
What's hurting the live business overall?
It's a combination of things. The price (of shows), and the surcharges; I think that's what is souring people the most. They are ridiculous.
Most of your roster works with cheaper ticket prices.
Yeah, I would say that most work in the $15 to $20 range before service charges are applied which are very high.
There are two key points in there concerning live music. The first is that his business -- which represents a ton of top independent acts, isn't hurting. We've spoken to a bunch of musicians who fit into that same category, and keep hearing basically the same story. If you're in the range where you're performing clubs and small theaters at $15/$20 a head, and have a decent fanbase, you can do quite well.
The second point, of course, is the sheer inefficiency of the ticketing process that has allowed middlemen to add all sorts of annoying fees and surcharges. It still seems like that's an area ripe for change.
Later in the interview, Windish makes another point that we've discussed in the past as well. "Live" doesn't necessarily mean having to go all the way around the country. It can really mean building up a really strong local
audience, and gradually expanding it. That was a key part of Corey Smith's successful strategy
, in that he kept touring locally, and kept slowly expanding his geographic footprint. Even today, his (massive) success is still located mostly in the southern US, and he's admitted that the next step is to slowly start to expand into the northeast. In the interview here, Windish makes a similar suggestion for bands. After talking about how many bands mistakenly just focus on playing big "festivals," the interviewer and Windish point out that building up a local audience (i.e., the old fashioned way of doing things) still works:
If a band doesn't land a festival, it can work within a region and explore opportunities.
That's a good way to do it, too. That's kind of an old school way of doing it. We have a lot of bands, especially foreign bands, that will come here and focus on New York for a week. Then, they go home to France or the U.K. and keep playing where they live. Then they come back here, play New York more, add in L.A. and, maybe, add in Toronto. Then they will go back and work in Europe again. The buzz that is generated in Europe will trickle over here pretty much immediately.
The point is, there are lots of interesting strategies that various acts can use to be successful well playing live shows -- and simply assuming that "live doesn't work" because Live Nation is having a down year sort of misses the point.