Another way bands don’t make money

Summer-Music-Festivals

To follow up on my previous post, Most musicians don’t make money, and the so-called sustainability of popular entertainment (see part I and part II), I found some interesting pieces discussing some of the hurdles that many full-time working bands have to deal with.  Some of this was of interest to me as I prepare for a short Spring tour in March and another one in November.

For a while there was much press about the new model of popular music following the decline of Stadium Rock type concerts (which is consistent with the NEA data about the declining audiences for this type of benchmark event).  This is the music festival.  With the seeming popularity of LollapaloozaBonnaroo and (former) Lilith Fair, the live pop music industry thought they had found the answer to declining interest in Stadium Rock.

A piece, Who’s Getting Rich Off Summer Music Festivals, by Anne Stewart about Summer Music Festivals gives a much more sobering account of that former enthusiasm.  One of the opening paragraphs echoes this:

The sentiment is echoed in business models being pushed by the music industry itself. The summer music festival scene is exploding. The hugest multi-day concerts, like Austin City Limits and Sasquatch, are selling out months ahead of time. Old staples, like Sarah’s McLaughlin’s Lilith Fair, are being reborn, and locally-organized independent music festivals and folk festivals are springing up and growing all over the world.

As the received wisdom goes, the next paragraph states:

And the festival model makes sense for promoters and producers. Rather than funneling time and money into a single artist, and concerts that may draw a few hundred fans, they get to run an efficient, cost-effective music Wal-mart: huge crowds all get the same decent product, relatively low cost-per-band, short sets, cattle-style herding from beer to food to port-a-potty. It all runs like a big box store for concert-goers.

But as I mentioned in the previous post–the superstars are the money makers at these festivals.  They bring in the crowds and command the highest fees.  As the article states later:

The sad truth is that music festivals are run using a strict and rapidly scaling payment hierarchy. Headlining acts make a lot of money, and less famous bands – independent bands – earn, well, not money so much as the absolute, unmitigated honor of playing a well-attended festival.

The majority of the budget and payment goes to these top tier acts while ‘The rest goes to “middle tier” acts, and the dozens of other bands playing through the sweaty afternoons are lucky to get their hotels or travel expenses covered.’

As the next to final paragraph states:

Last year, North American festivals pulled in an estimated $2.5 billion, while UK music festivals boosted the economy by 130 million pounds. It’s hard to believe that somewhere amidst that Scrooge McDuck pile of money, there’s not a way to pay all performing artists fairly. After all, if touring and summer festivals are going to be the new business model for the working music industry, than [sic] everybody’s got to get paid. Not just the handful of headliners.

By the way, even though the piece above does mention some British festivals, here’s a piece specifically about them by Greg Cochrane: “Music festivals ‘are paying too much for artists’“; and for the non festival-going groups who just tour, there’s this piece (with a quote of some statements by Shane Blay of Oh, Sleeper from a piece titled “Why Mid-Level Bands Cannot Make Money”) talking about the economic reality of making money off touring (if you’re not a superstar):

Popular opinion states that a band’s business model in the current economic and technological climate is ‘give the music away for free, make money on tour’. But, with rising costs and other factors, it seems even that is a falsehood.

So, if most musicians aren’t going to make money off of a big music festival or touring (unless the artist is a headliner), then what about Albms (either hard copy or digital) or merchandise?  Wouldn’t these things help pay the artist for his or her (or their) time?  Ironically, two of the pieces above are also responses to the changing climate of album sales.  Given digital downloading, since most artists aren’t really making money off their music then surely touring is the meal ticket right?

This piece by Matthew Humphries, Indie band reveals how tough it is to make money with digital music, breaks down the take from digital as well as traditional album sales excerpted from a piece written by Courtney Love.  The piece above with the Shane Blay quote gives the breakdown of the take from Merch which is dismal when you’re getting just above a sixth of the cut when all other merch related expenses are taken account of.

This piece, No Money, Mo’ Problems: Why even successful bands struggle financially, by Emily Zemler breaks down all three components (CDs, merch and shows) a little differently (if not just as pessimistically).  Here are the relevant sections quoted:

First: CDs. What happens if you hop over to Best Buy and pick up a new record by your favorite band? Say you pay $10 for the album. Depending on whether the band are signed, what sort of label they’re signed to and what kind of distribution deal that label has, the store will likely keep about $5. The remaining half goes to the record label. If the band are signed, the label uses that “profit” to pay back the money that was used to make the record—both creatively (including costs for producers, studio time and equipment) and constructively (album packaging, distribution costs, etc.). In the end, the band probably will not see any of that money you spent minus a small portion for mechanical royalties.

If you buy the CD from the band’s merch table at a show, they’ve probably already bought that box of their own album from the record label at a wholesale cost. If they’re lucky, they may earn a few bucks on each one. “It’s even hard to sell CDs at shows now because they cost so much for the band to even get them wholesale,” says THIS IS HELL guitarist RICK JIMINEZ. “For a while, it was a recurring thing to see $5 CDs at merch tables, but most labels charge their bands at least that much just to sell them.”

Second: T-shirts and other merch. This too can vary, but as Rickly says, “For some reason, that’s the piece of the industry that bands control the biggest piece of.” But merch still incurs costs. Rickly explains if there’s a Thursday shirt on sale for $15, the band end up with $4 or $5 profit. The venue takes about 20 percent, depending on its size and policies. It costs $3 to $4 to make a shirt, depending on which brand the band use; and a band’s merch company takes about 20 percent. Still, as Rickly puts it, “I can say without a doubt that if you want to put money in a band’s pocket, buy a T-shirt [at a show].”

Jonathan Diener agrees. “Ordering merch before a tour is one of the biggest hits you’ll take, depending on the size of the shows.” Devoto adds, “I suppose the two best ways to make money are creative merch items that people actually want, combined with endless badgering. Talk to every person in the crowd and trick them into buying your merch. No shame.”

But what about ticket sales? You might pay up to $40 to go to some shows, so why should you have to buy a shirt to make sure your favorite artist has enough gas to make it to the next city? Again, the income has to measure up to the costs. Enders describes the impetus for his recent decision as a struggle to survive on the road. “It’s become really hard to survive as a musician or any type of artist,  because the funding is not there,” he says. “I can’t afford to do it, is what it comes down to. It takes a toll on everybody—my family, friends, my connections to people over the years have diminished.” Because touring costs so much money, Enders, who is currently unsigned, says, “You come away from a tour mostly hoping to break even, for an artist like myself. If you break even, that’s a successful tour.”

There’s tons more information in the piece and all taken from “successful” touring mid-level (i.e. non-Superstar) bands and Indie artists.

Having aspirations of being a full-time working musician based on the popular model of a being a touring artist or by selling albums or merch just isn’t a very sustainable model for most musicians.  And there are many more musicians in this boat than there are “successful” ones who can somehow make that living as a full time musician.  On the other hand–unless the artist is a Superstar, then it is just as likely that he or she will be supplementing their income with other activities both musical or not.

My advice to musicians who are trying to make it–especially classically trained musicians (or music critics) who’ve never really worked in the local pop and band music scenes don’t be seduced by the romanticized and so-called ‘relevant’ popular music model because it isn’t any more a model for financial (or even artistic) success than the ones already in place for classical music.

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7 thoughts on “Another way bands don’t make money

  1. “Headline acts make a lot of money” ???!! In terms of a band I personally know, who are on major label in the US, sold 700k+ copies, extremely high youtube views, well known act, headline tour support, corporate sponsored band, touring in brand new tour bus around the USA on major label for several years now with 3 major releases – THEY LIVE IN APARTMENT IN L.A AND STILL CANNOT AFFORD TO BUY HOUSES! That’s the music industry.. there’s no rich anymore in it as far as indie or mainstream crossover rock etc. This article is bullshit. Business models? What model? People in music industry are not scientists neither economists, they’re not very clever. No point making dumb stuff sound like fancy business. The Internet as torn apart the industry regardless of lack of encryption on products since the 90′s. Most new signed bands make little off merch even if known, and make nothing or barely break even touring these days anyway. Musicians that wish to be touring professionals have to understand what they’re getting involved in and to realise there is no future security in it and no money prospects. In these times that’s a dangerous thing, some of these artists known musicians get to mid forties completely broke still scraping by to pay the rent. – Ex-indie & major label finance executive (no longer in the music industry).

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