Venues investing in bands

[ZERO HEROES]

 

Then again, maybe it points to a strategy where more bands could invest in major concert venues (diversifies their portfolio, even if their act doesn't stick, they can still get an ROI)

 

 

If they have the $$$, don't need help from the venues.

[slight-return]

 

Concerts only. But my post addresses his "economic" reply.

 

 

Was there a breakdown about the level of concerts ("size/type" of act, ticket prices, size of venue) in the article? we may have a multi-modality with, say, the "arena" style concerts vs say the local center for the arts concert

 

we'd really need more info before we can accurately use the data (some areas may feel the pinch more, less or in a different way than other areas)

[slight-return]

If they have the $$$, don't need help from the venues.

 

it's that way all around...

The venues themselves may not have the money either (higher cash flow, but much higher debt load too), hospitality industry can have people mortgaged to their tits as well and can be economically savage, esp when that compressor goes out on the walk in

 

Then again, the band may want to do a longer term investment strategy -- invest in the venue, realize some return there (take pressure off their earnings from performance)...take some pressure off the venue to merely "make their weekly numbers" giving them more breathing room for performance situation, even get some control interest in the venue which could help with the policies toward the performers.

[ZERO HEROES]

 

Was there a breakdown about the level of concerts ("size/type" of act, ticket prices, size of venue) in the article? we may have a multi-modality with, say, the "arena" style concerts vs say the local center for the arts concert we'd really need more info before we can accurately use the data (some areas may feel the pinch more, less or in a different way than other areas)

 

 

 

For stats, they just mentioned that and CD sales being down 36% since 2000.

[ZERO HEROES]

 

Then again, the band may want to do a longer term investment strategy -- invest in the venue, realize some return there (take pressure off their earnings from performance)...take some pressure off the venue to merely "make their weekly numbers" giving them more breathing room for performance situation, even get some control interest in the venue which could help with the policies toward the performers.

 

 

 

 

There are some well off bands that have helped venues. Some have even opened their own. But I can't think of any venues investing in bands.

[The*Ataris]

Ok, I'm going to propose a hypothetical scenario, using my band as an example, but will embellish some details for the sake of making my point. Let me know if I'm off-base, yeah?

 

My band has been together two years. Yet, we've known each other for ten and have played in different combinations before. Great drummer, limitlessly talented lead singer/songwriter, capable guitar player with an ear for arrangement, and a bass player, while competent, has to be reigned in at times. We can write good songs, rock on stage, and are young and charismatic enough to appeal to the audiences the music industry markets rock bands to (whatever that means).

 

However, we're all either college students or recent graduates and can barely afford to eat and make rent, let alone generate enough income to fund our band properly. We play shows once or twice a month, make about $100-200 off the door and merch, and pretty much get to pay for our practice space once a month.

 

We're sitting on 10-12 solid demos, and after two EPs, we're getting anxious about recording a real record. Yeah, we've got another 5-6 demos to go, but it's time to get to ball rolling. I own a bunch of solid recording equipment, but we've got big ideas and we're going to need to outsource some tracking work.

 

The only problem? We're broke. No money to track drums, no money to master the thing, no money to manufacture the product or promotional material.

 

So (here's where the really hypothetical stuff starts), a local club we like to play hears our plans are being held up due to a lack of funds. We draw well there, they like our music, and they've done well enough over the past few months that they're saving a decent amount of money. They ask us what it would take to finish the record and we tell 'em we'll think it over.

 

Just throwing some figures out:

 

--Three tracking sessions @ $400/day. $1200

--Send the record off to mastering. $600

--Run off 500 CD's (half promo, half for sale). $800

--Press 300 12" records. $1200

--Promotional materials. $500

--Postage. $250

 

...and that's only because I can track half of it and mix the whole thing. So, what? $4600 minimum?

 

Ok, we walk back to the club and tell them we can get the record out for $5000. They say, "Ok, we'll front you $5000, you get the record out, you tour using our connections around the country, and you only play here when you're in Colorado." The money lent to us is fully recuperable and they get 75% of every record sold. We keep our publishing; they own the master and can press more as they feel necessary.

 

Would it be worth it?

 

I don't know.

 

Let's say they hook us up with a good booking agent and the record is actually getting some low-level press. A thirty date tour is booked, the booking agent can get us a $400 guarantee, and we're smart about saving money we make (ie. no drugs, minimum food expenses, etc.). We bring home $3000 ($100/show after expenses?) in just club payouts, so what do we need to sell in merch?

 

Records are $6 profit and CD's are $8 profit, so sell 200 CD's and 65 records we'll say? That's probably doable...

 

I don't know; I'm tired. I'll check back tomorrow...

[sabriel9v]

 

If you want to encourage people to see a band again, you'll need more than a nice poster or flyer.

 

 

Tell me, from a monetary perspective, what incentive does a venue owner have to get an audience to see any band for a second time? How do venues generate crowds in the first place?

[BlueStrat]

 

Tell me, from a monetary perspective, what incentive does a venue owner have to get an audience to see any band for a second time? How do venues generate crowds in the first place?

 

 

I know how they used to do it and how a few successful ones around sill do. One of the guys I play for and I have had this conversation. This is how he does it::

 

1) He believes it is his responsibility to attract a crowd. He also believes it is foolish for any venue to rely solely on live music for their livelihood. In fact he relies on it not at all.

 

2) because of this governing philosophy he has a clean club, friendly and efficient staff, serves good bar food (their pizzas and sandwiches are well known here) and 31 different beers and ales on tap, all reasonably priced. He also serves cocktails.

 

3) He screens the bands he hires personally.

 

4) He advertises in the paper, radio and on the web. He has a PR guy he works with that gets him writeups in the paper and local weekend magazines.

 

5) He has events going on at his place all the time that aren't related to having bands-right now he's getting ready for the 12 Ales Of Christmas promo where a 20 dollar admission will get you pints of 12 different ales. He has deals like this all the time, as well as having some nice big LCD TVs in HD for watching sports during the day.

 

In other words he has set out to build his own client base. And he's succeeded. There are a few places around like that.

 

With few exceptions, the ones who rely on bands to bring the crowds seem to always be closing down, changing formats or changing owners.

[slight-return]

 

There are some well off bands that have helped venues. Some have even opened their own. But I can't think of any venues investing in bands.

 

 

 

It may be that's a more viable investment strategy (though we did have the "vegas" option mentioned)

[both cases may not downscale]

[primeelite]

I think bands are getting investments from venues every time they book them even if its a percentage of door. They are giving you a place to play that you don't have to go rent out and take a chance of not making your money back. They are basically saying we trust that you can bring enough people so we don't lose money and in return we will give you a piece of the pie for bringing in the people. My company is promoting a band in Dallas and we just booked them for a few gigs with many more coming and they seem to be getting a good buzz in the area before we really even have gotten started on the major parts of the project. I don't think the DFW area is dead as far as music it is just all about bringing music that gets people excited enough to want to see you live.

[slight-return]

 

For stats, they just mentioned that and CD sales being down 36% since 2000.

 

 

yeah not too much there fo shizzy , we just don't have the granularity of data we need to really see where and who is seeing that growth - just not enough info there

[slight-return]

we just booked them for a few gigs with many more coming and they seem to be getting a good buzz in the area before we really even have gotten started on the major parts of the project..

 

ain't it the way, they always show up high

 

[slight-return]

 

You'll have to explain this a little better. You lost me.

 

 

what part was losing you - let's see if we can clear that up

[danosongs]

No, you might as well just rent your own hall and sell tickets - which is what I've read of acts actually doing more and more anyway. Most in my area are just rooms that you have to fill on your own. I have had more success with non-bar gigs like private events, health food stores, art galleries, etc. At least there is some people there to tip and buy a CD. At the end of the day even huge signed bands are charged with filling an empty venue with bodies so that's just the business. I don't do gigs anymore that I don't get a flat fee for, or that don't have built in traffic. And that does mean that I am willing to play covers, which I love doing anyway - I just put my own spin on them.

[sabriel9v]

 

In other words he has set out to build his own client base. And he's succeeded. There are a few places around like that. With few exceptions, the ones who rely on bands to bring the crowds seem to always be closing down, changing formats or changing owners.

 

 

You hit the nail on the head. That's exactly my point. If venue owners sincerely want to help out bands they need to be providing clean, safe spaces to play out. Have a friendly and cordial staff onboard that's willing to help the band figure out where to load in/out, etc. And they should promote the hell out of the shows that are going on within their venue. Those are the basic functions of a music venue...if the venue owner wants to personally invest in the band, then he or she is taking on the role of an investor, totally different animal.

 

I can't tell you how many crappy venues I've played where the staff didn't know what was going on, didn't care, and then we received chump change or didn't even get paid at the end of the night...usually the latter. At gigs like that you can only hope that you get some free PBR and have enough energy to not feel like a steaming and depressing pile of crap in the morning before you go to work/school. Musicians shouldn't have to worry about gigs and venues like that, but sometimes we still do. If a venue wants to invest 5k in my band, that's sweet. But on the other side of the token, I would still have to wonder, what are they going to get out of it and how will I be charged?

[ZERO HEROES]

 

my apologies which parts seem to be losing you?

 

 

Well, I don't know what you're trying to explain.

[ZERO HEROES]

 

I think bands are getting investments from venues every time they book them even if its a percentage of door.

 

 

 

It is a business deal, no more, no less.

[slight-return]

 

Well, I don't know what you're trying to explain.

 

 

ah OK

 

With things like the touring trailer - that's sort of a general (as opposed to specific to venue operators) investment so securing financing from someone such as yourself, who's core biz in music performance, or someone involved in small venture cap. (a bank even) would be closer to the core competency of the investor

 

 

OK things like a touring trailer aren't directly tied to the venue (ie touring and other around-town jobs may not increase draw to the venue and, for the local stuff could even negatively draw..it's more about benefit to the band as an independent venture...actually it can help their independence from the venue).

 

so it's not so much a "this is good for the venue" thing as it is a general (put these many dollars into the operation...could be a band, could be a candy factory, could be oil drilling) type of investment as it's good for the band operation, but is tangential to the venue operation.

 

[A counter example might be the vegas residency where the artist-specific facilities investment ties directly to the venue]

 

 

So, as a general investment , it could be better to look toward general investors - venture capital firms, banks, etc -- guys that work money through biz ventures and analyze the specific risks/returns as their core competency.

 

Or toward investors who's core competency is musical performance production, such as yourself.

[MartinC]

Here's my thoughts on your hypothetical post. It seems like you guys have put a lot of time and energy in your group-you've almost got a cd out. 5k short. For 5k, or even 10k, you'd be crazy to take in a partner. You'd be better off putting 5k on a credit card.

 

As to a club actually helping you, sure you should ask them for whatever contacts they might have, but expecting a club to do more is probably unrealistic. Your band isn't making any money, and even if you have a cd, it doesn't mean your going to start making money. You might..........

But you could also start making money now, by whatever means needed, money that could finish the cd, money that could promote your group, money to hire people that could promote your group. If four guys can't put together 5k, I'd question the commitment. How many of those guys are really committed to making this group their career? Or are some just hanging out kinda hoping the band will take off and if not, then it's off to a day gig or new band?

 

A successful band is a business. Any of you guys have any training or experience in running one? If not, someone needs to get some. What your doing is really not much different than trying to establish a coffee shop. You need money for startup costs, advertising (promo), etc. You need to network for work, and for customers(fans). You need to plan for staffing issues(band members who might leave, support people, etc)

 

Expecting an angel to come along and do all this for you in exchange for possible future profits is not the best way. It could happen, but it's more likely to happen for groups who have helped themselves a lot further down the road. And that's when you'll really be able to use that help, to hopefully get you to a level that you can only get to with established industry support. Establish some goals like: We are going to finish the cd, get five good reviews in respected media, which will enhance our promo pack. We are going to draw 200 people or more to four different shows. We are going to document those shows and their success, and we are going to sell 1000 cd's all in the next year. We are going to earn X amount of money, and invest y amount directly in our business. If four truly committed talented adults can't do that, or something like that, your wasting your time IMO. You might be having a blast, but your getting nowhere as a group. You might find that you can surpass your goals by far, in ways you haven't thought of.

 

 

 

Ok, I'm going to propose a hypothetical scenario, using my band as an example, but will embellish some details for the sake of making my point. Let me know if I'm off-base, yeah? My band has been together two years. Yet, we've known each other for ten and have played in different combinations before. Great drummer, limitlessly talented lead singer/songwriter, capable guitar player with an ear for arrangement, and a bass player, while competent, has to be reigned in at times. We can write good songs, rock on stage, and are young and charismatic enough to appeal to the audiences the music industry markets rock bands to (whatever that means). However, we're all either college students or recent graduates and can barely afford to eat and make rent, let alone generate enough income to fund our band properly. We play shows once or twice a month, make about $100-200 off the door and merch, and pretty much get to pay for our practice space once a month. We're sitting on 10-12 solid demos, and after two EPs, we're getting anxious about recording a real record. Yeah, we've got another 5-6 demos to go, but it's time to get to ball rolling. I own a bunch of solid recording equipment, but we've got big ideas and we're going to need to outsource some tracking work. The only problem? We're broke. No money to track drums, no money to master the thing, no money to manufacture the product or promotional material. So ( here's where the really hypothetical stuff starts ), a local club we like to play hears our plans are being held up due to a lack of funds. We draw well there, they like our music, and they've done well enough over the past few months that they're saving a decent amount of money. They ask us what it would take to finish the record and we tell 'em we'll think it over. Just throwing some figures out: --Three tracking sessions @ $400/day. $1200 --Send the record off to mastering. $600 --Run off 500 CD's (half promo, half for sale). $800 --Press 300 12" records. $1200 --Promotional materials. $500 --Postage. $250 ...and that's only because I can track half of it and mix the whole thing. So, what? $4600 minimum? Ok, we walk back to the club and tell them we can get the record out for $5000. They say, "Ok, we'll front you $5000, you get the record out, you tour using our connections around the country, and you only play here when you're in Colorado." The money lent to us is fully recuperable and they get 75% of every record sold. We keep our publishing; they own the master and can press more as they feel necessary. Would it be worth it? I don't know. Let's say they hook us up with a good booking agent and the record is actually getting some low-level press. A thirty date tour is booked, the booking agent can get us a $400 guarantee, and we're smart about saving money we make (ie. no drugs, minimum food expenses, etc.). We bring home $3000 ($100/show after expenses?) in just club payouts, so what do we need to sell in merch? Records are $6 profit and CD's are $8 profit, so sell 200 CD's and 65 records we'll say? That's probably doable... I don't know; I'm tired. I'll check back tomorrow...

 

[The*Ataris]

 

Expecting an angel to come along and do all this for you in exchange for possible future profits is not the best way. It could happen, but it's more likely to happen for groups who have helped themselves a lot further down the road. And that's when you'll really be able to use that help, to hopefully get you to a level that you can only get to with established industry support. Establish some goals like: We are going to finish the cd, get five good reviews in respected media, which will enhance our promo pack. We are going to draw 200 people or more to four different shows. We are going to document those shows and their success, and we are going to sell 1000 cd's all in the next year. We are going to earn X amount of money, and invest y amount directly in our business. If four truly committed talented adults can't do that, or something like that, your wasting your time IMO. You might be having a blast, but your getting nowhere as a group. You might find that you can surpass your goals by far, in ways you haven't thought of.

 

 

Now, this paragraph is golden! In fact, it should be stickied; especially the first part. Bands shouldn't need outside help until they're far enough along the 'curve of success' to make it worthwhile.

[Bensbeenjamin]

With the few venues around my area, you're lucky to make 50-75 bucks just because there aren't many ppl willing to pay to see a band unless they really like the band. But I've heard of some people doing shady business by booking a "bigger" band to come play and leaving the band holding the bag, so when it comes down to it you really just need to make the right friends in your area if you wanna get payed and promote your band because if you don't let the word out that you're playing you can forget making any big bucks.

[sabriel9v]

 

But I've heard of some people doing shady business by booking a "bigger" band to come play and leaving the band holding the bag, so when it comes down to it you really just need to make the right friends in your area if you wanna get payed

 

 

What do you mean when you say, "holding the bag?" Are you implying that the bigger band will bring in a larger crowd?

[ZERO HEROES]

 

OK things like a touring trailer aren't directly tied to the venue (ie touring and other around-town jobs may not increase draw to the venue and, for the local stuff could even negatively draw..it's more about benefit to the band as an independent venture...actually it can help their independence from the venue).

 

 

 

But it can be. Have the trailer wrapped and every where the band goes, the venue gets promoted as well.

[ZERO HEROES]

 

Here's my thoughts on your hypothetical post. It seems like you guys have put a lot of time and energy in your group-you've almost got a cd out. 5k short. For 5k, or even 10k, you'd be crazy to take in a partner. You'd be better off putting 5k on a credit card.

 

 

 

When I've put 5K into bands, I only require 15% back. I also don't require monthly payments or charge fees ;-)

[daddymack]

But it can be. Have the trailer wrapped and every where the band goes, the venue gets promoted as well.

Yes, but to who's benefit? Odds are that someone in Lincoln, Nebraska is not gonna run out to Seattle to check out a venue. Venues generally only benefit from local promo. If a band warrants a trailer, they should have made the money to rent or buy it. From a business standpoint, unless the band is bringing money into the venue on a regular basis, and I mean a noticeable amount of trade, then the venue should consider splitting promotional costs with the band. Beyond that, I don't see any reason why a club owner would need ot 'invest' in the local talent pool, especially when you think about how short lived most bands are.