The economics of travelling bands

September 23, 2008 5:19 PM

I'm told that for bands, the money is in live gigs - not much comes in from album sales. However. I was at a concert in Los Angeles recently, full house of about 500. Three bands, of which two had recently played Coachella. $25 general admission. This, to me, seems like terrible money. What's really going on? Help me overthink my plate of beans.

So $25 x 500 = $12500 in ticket sales. Split that up between the three bands, and each gets $4166. This doesn't seem much, considering that two of the bands were from middle US, and one from London. Flights, extra baggage fees for equipment, hotels, crew members...

It's about 5 members to each band. London band: doesn't it cost ONE person about $900 to fly coach from London to LA? $4166 won't cover five members and their road crew. Mid-US bands: isn't it about $400, also flying coach? That's $2000 in flights, leaving only $2000. And each band member gets $500 before the venue takes its cut.

I'm assuming more money is accumulated over the course of playing several venues, but it seems that they're only playing five. Similar general admission fees. The mid-US bands accumulate more money here, but London seems to still be playing for pocket change.

The venue's already well-established, even without rock concerts. They don't seem to need to bring bands in at a loss in order to get their venue's name out there.

Not mentioning the bands, just in case this ever gets them into hot water with Upper Management. And anyway, I'm fairly certain this is a common scenario.

posted by Xere to grab bag (27 comments total)

Don't forget about merchandising. I was at a concert last week for well-known band from the UK. Audience of about 300-400, general admission was $20.
After the show, I bought a band T-shirt for $25.
I imagine the profit margin on apparel and the like is pretty substantial compared to anything they make from concert attendance.
posted by anifinder at 5:37 PM on September 23, 2008

I've always heard that heavy touring bands make a lot of their money from merchandise sales. And even if your figures all add up and each band only makes $2000 for each show in the US, that's still $10K for five nights of work. $10K for five to 10 hours of actually working and being a musician? Sounds okay to me. Do you really think these people are in it for just the money?
posted by LionIndex at 5:37 PM on September 23, 2008

And yes, I realize that the 10K is still going to be divided between the band members. Still, $2K for 5 hours of work, while traveling in a foreign country as a rock musician still sounds pretty good.
posted by LionIndex at 5:40 PM on September 23, 2008

In all but the smallest venues, it's a little more complicated than that. You've got multiple businesses being run here who all support each other. The venue, the record label, the band itself, associated vendors. It depends on the type of venue, too.

For acts considered enough of a draw, the venue pays the band a "guarantee" -- a minimum fee, basically. The venue makes money off of the concessions (hence those $6 Budweisers), ticket fees, there are investors involved, etc.

The only places where the bands get paid by divvying up the door money are small venues that book mostly local and regional bands. And yeah, for these, the money from live gigs is shit and doesn't cover the bar bill.
posted by desuetude at 5:41 PM on September 23, 2008

Your logic for this is all wrong. The venue isn't in the business of providing a platform for bands. The venue is in the business of filling the joint, and more importantly SELLING BOOZE. The bands, especially the best known band, likely are getting payed a flat fee, not a cut of ticket sales. So your formula is more like this. (Ticket sales + Revenue from booze sales) - (fee for bands + wholesale cost of booze + salaries and other carrying costs)= Revenue for the venue.
posted by kimdog at 5:46 PM on September 23, 2008 [1 favorite has favorites]

LionIndex, whether or not they are in it for the money is not really part of the question. In my opinion it actually misses the point entirely.

There is a meme in circulation that "bands make their money from touring". While this is relatively true, it is only relative because they don't make any money off of their albums unless they are very popular. Popular in the pop music, top 40 Nickelback kind of way. Piracy being what it is.

From what I know, touring bands get a "guarantee" for each night on tour. For the mid to lower tier bands (Coachella non-headliners included) this probably means enough to cover expenses and perhaps a fairly modest budget. Touring is not the money making part of a band's career. More often than not it is the unpaid vacation barely-break-even-before-getting-home part of their day job's career.

This even goes for fairly well known acts these days.
posted by dobie at 5:49 PM on September 23, 2008

If they really fly from London, play one show, fly home, and then fly somewhere else for one show... that's not only not much money, it's really bad management.
posted by rokusan at 5:51 PM on September 23, 2008

The sad thing is you pretty much got it right. Anything you buy at the show goes into the band's pocket at a high profit, and bars tend to care more about selling drinks so bands pocket a good percentage of ticket sales, but to say most bands make a lot of money gigging is just not true. If you could line up a lot of shows ticket sales will cover expenses, but for mid level bands it usually just doesn't add up to a lot of profit. They need to play shows regularly to build up a fan base, which hopefully will translate to bigger venues in the future. 25 X 500 is not so good, but 25 X 5,000...well, you get the picture.

Also, when people say no money is in the album sales they are generally referring to albums distributed by record companies. Independent bands who print their own albums make good profit off of each unit. In the case of albums bought at a retailer (Best Buy, etc.), the money is being split amongst all the people who put the CD together (a LOT of people work on every major release), and the artists make an average of 4% on each copy sold AFTER the recording costs are recouped by the record company. Again, that's not much.
posted by Me, The Snake at 5:51 PM on September 23, 2008 [1 favorite has favorites]

the bands aren't the ones selling the tickets, so it's not like they are directly splitting up the show profits. be assured that the bands and the venue have guaranteed fees they are receiving.
posted by gnutron at 5:58 PM on September 23, 2008

The venue is in the business of filling the joint, and more importantly SELLING BOOZE. The bands, especially the best known band, likely are getting payed a flat fee, not a cut of ticket sales.

While this is common, it's not completely true. I used to book bands at a large venue in the midwest a few years ago.

This is totally dependent on who the band is, how popular they are, and who's touring with them. In a traditional lineup, you have one headlining band and two support bands. The touring bands choose the support bands. Promoters deal with agents and agree on a guarantee, let's say $7,500. Meaning no matter what -- even if no one shows up -- they get paid that much money. And then there's usually a separate, agreed upon price for support that works into a different budget -- let's say $1,000 for both bands. That's a total package of $8,500. And then there's usually a percentage agreed upon after the fact that, if the gross ticket sales goes over the agreed upon package rate, the bands and venue split the revenue -- something like 80/20. So if it sells out, they have a potential to make more money.

But this is just an example, and I rarely worked the same deal twice. Sometimes, even with big bands, we'd do a straight up split, where the venue gets 20% of ticket sales, and the bands get the rest (after taking out fees, like hospitality).

And yeah, support bands typically are paying for pocket change. But they're support bands, they're having their music thrusted upon thousands of fresh eyes, so it's worth it to them in the hopes that one day they can be the headlining act and pull in more money.
posted by nitsuj at 5:58 PM on September 23, 2008 [1 favorite has favorites]

nitsuj got it right. The money is in touring, but it only kicks in at a certain level. It all depends on how many people you bring to the show, your deal with promoters, the venue, touring costs, ticket costs, and your booking agent. But touring is traditionally one area of revenue that the record company doesn't get a cut of. That's changing.

Someone like Mariah Carey can make 20 - 30 million per tour.

The reason album sales are not considered high profit areas for the artists has to do with their contracts, advances, and recording costs. In the end, they typically only get between 15 - 20 percent, and that's gross.
posted by luckypozzo at 6:12 PM on September 23, 2008

It doesn't seem all that bad to me. Here's how I look at it. Take for the night is $12,500. Venue gets half. Bands split the other half. Lets assume equally. That's $2000 for one night's work. Do that a few nights a week, and you're taking home some nice scratch. And that's before you sell CDs at the exits.
posted by gjc at 7:45 PM on September 23, 2008

LionIndex, whether or not they are in it for the money is not really part of the question. In my opinion it actually misses the point entirely.

Although it's admittedly not in the original question, I picked up a vibe of "why would anyone bother to do this?" from the original post. My opinion is that if you're making some money, why not do it? At least in my area, $25 a ticket would be for a fairly decent, well-known band, on the order of Wilco or something. I've read statements by Wilco saying that they make all their money touring (which is one reason why they really didn't give a crap about releasing Yankee Hotel Foxtrot over the net when they got dumped from their label -- that wasn't their bread and butter to begin with), but they seem more like they're at the level nitsuj is talking about. The bands that play at my local $10-a-show place all work day jobs.
posted by LionIndex at 8:13 PM on September 23, 2008

nitsuj and luckypozzo have it.

my family is fairly close family friends with a family from Oklahoma who had a number of their sons form a boy band that was pretty successful not so long ago (if that's not enough hints, me-mail ThePinkSuperhero).

whenever they came to do a show in a town i happened to be in at the time, they'd call me or i'd call them and i'd end up backstage waiting for them to get done being worshiped by hordes of teenage girls. ah, what could have been.

anyway, i got friendly with the manager of the band along the way, running into her and shooting the shit and kind of casually investigating a potential career in band / tour management. she told me that the big money is in huge-ish shows, particularly for the bands with the massive followings (U2, the dead, etc.). she said a lot of the big pop artists tour and actually lose huge sums of money doing it, to promote album sales (where they hopefully make it up - the Ricky Martins, et. al. - that was the example she used). she hinted that they were slightly above that line at that point - I got the impression that they made a relatively modest profit off of touring. given that they still tour to this day, I assume the same is still true.

long story short, i got the distinct impression that unless you're pulling in 5,000+ people per show (for your headliner band), you're not going to make any serious money touring. and there are those who are pulling in 4 or 5 times that many fans for shows who are losing money on the tour and making it up (or so their managers hope) in record sales.
posted by allkindsoftime at 8:27 PM on September 23, 2008

It doesn't seem all that bad to me. Here's how I look at it. Take for the night is $12,500. Venue gets half. Bands split the other half. Lets assume equally. That's $2000 for one night's work. Do that a few nights a week, and you're taking home some nice scratch. And that's before you sell CDs at the exits.

If you can do that for more than a couple nights, you're also among the most popular bands in the world. Very few bands - maybe a few dozen - could do this. And if they can, you have to factor in all the things Xere mentions that you're leaving out - travel costs, crew, tour bus/van. Even if the band is netting $2000 a night after all those costs, splitting that four ways gives each of you $500. Take a look at mid-major band tour schedules and there are at most 30 dates or so. 30x$500 is $15,000 a year. You'd make better money working fast food. Selling the CDs at the door would also involve buying them from your label (whether major or indie) at about $10 each and thus fronting thousands of dollars that have to come from somewhere. Self-releasing would lower your unit cost and increase your return on the CDs, but still require fronting thousands of dollars that have to come from somewhere.

My band once filled a decent-sized venue (100 people or so) and we netted $40 each. And that was our hometown, not being on the road with a gas-guzzling van and needing a place to sleep. The majority of the shows I've played, even when we filled places, we actually lost money. I knew people with what I thought of as far more successful bands than us and they swore that the only place they kept any money at all in the end was the merchandising.
posted by el_lupino at 9:13 PM on September 23, 2008

The Lefsetz Letter Blog is an industry blog that talks all about how bands make money these days and how they can make money even with free downloads of music etc. Read through the archives and you will learn more than you want to know about the music business. Often, when he writes about a specific artist, that artist will reply to him and he will post the reply. That is neat.
posted by JohnnyGunn at 9:15 PM on September 23, 2008

Very few bands - maybe a few dozen - could do this.

What? You're crazy. :)

Lots of bands do this. We had sold out, or close to sold out, shows a couple times a week where bands netted that much or more. And we were a "club," not an arena or anything crazy big like that.

Just take a look at any random mid-sized club's schedule and you'll see what I mean. Like The Vic in Chicago, for example (not the club I booked for, FWIW). This place holds about 1400 people. A sell out show would net $28,000 at a conservative $20 ticket price. Of course, that doesn't all go to the bands -- you have to figure in taxes and and all that other stuff -- but a good chunk of it does. I just saw The Faint there, a moderately well known band (not like MTV huge or anything though) and it was sold out. Tickets were $22.

Let's say the the band had a $12,000 guarantee, plus a 50/50 split on top. That's $12,000 + 50% of the overage, which is another $8,000. $20,000 for one night. Even when you take out expenses like bus and gas, they still make a lot. They don't pay for rooms, all food and drink and other assortments are covered in the rider.
posted by nitsuj at 10:04 PM on September 23, 2008

To go back to the original question, you can't every assume anything.

I'm assuming more money is accumulated over the course of playing several venues, but it seems that they're only playing five. Similar general admission fees. The mid-US bands accumulate more money here, but London seems to still be playing for pocket change.

Even if a band is only playing 5 shows, and they're from London, you never know what their offer was. When booking shows, an offer is a lot like buying a house. Your booking agent's job is to get the most money for you to perform. The promoter's job is to spend the least amount of money to get a performer in the club while still making them happy. That contract can stipulate anything -- plane tickets, whatever. If the band played Coachella, chances are transport was stipulated in the contract and paid for by the festival. And since they're already in America, might as well tack on a few extra shows if you've got the time, no?

Or maybe one promoter in particular was really dumb and way over-payed for a band because he was a huge fan. The band took it because it was a great deal and decided to pick up a few more shows on the way out there. Might as well, right?

For instance, colleges are notorious for over-paying for bands. You get a bunch of college students in a music committee locked up in a room deciding which bands to bring in for their yearly festival (paid for by the college, of course). They've got $50,000 to work with, so they go crazy with their offers. They're not running a business, they won't be selling booze -- they've got a stack of cash and, god damnit, they want to see their favorite band play down the street. So a band picks up a college gig and takes a few shows on surrounding dates for the fun of it.

The venue's already well-established, even without rock concerts. They don't seem to need to bring bands in at a loss in order to get their venue's name out there.

Kimdog was correct in saying that venues are in it to sell booze. That's it. Don't get me wrong, we were passionate about music and booking bands, but we rarely got to book bands we loved. To keep our jobs and make money we had to book bands we knew were going to bring people. People who liked to drink. Metal shows? Gold. Country shows? Gold. Concert Flautist? Sorry.
posted by nitsuj at 10:20 PM on September 23, 2008

The question is "How can it be, that my math, bands make terrible money". I suspect that a part of the answer is that lots and lots of bands *do* make terrible money, like many many people in the arts. The super-stars get rich, of course. But my understanding is that lots of bands, bands you like, bands you've heard of, bands with a couple of hits - they ultimately don't make a lot of money. They travel in crappy conditions, they sleep on floors, they go in and out of bad day jobs. If you have an okay-paying job you don't love, and you see, say, a band who's recently played Coachella, it seems reasonable to assume that they are at least as well-off financially as you are. But in many cases, I believe, they are not.

So the answer may just be: Yeah. It is terrible money. They just figure its worth it, for the fun, or the art, or the hope that there's more money down the way.
posted by ManInSuit at 10:44 PM on September 23, 2008

We do this every night.
posted by knowles at 3:36 AM on September 24, 2008

The real problem with this scenario is the 500 people isnt a lot of people. That's small venue. Having three bands, one of whom is flying international, is crazy. The math is bad because the venue is just too small to support those acts. For this scenario you'll need to fill 1500+ seats, not 500. For Chicagoans, that's the difference between the Empty Bottle and the Vic. Bands selling out the Vic (as mentioned before) are going to make a real profit. Bands selling out the Bottle probably arent, especially if they arent doing much merchandising and have 2 openers.

FWIW, The Aragon holds 4500 people. 25 x 4500 = $112,500 gross ticket sales. My Bloody Valentine is going to be there this weekend. They will make a serious money at 40 dollars a head. $180,000 gross. I wouldnt be surprised if they got a 100k guarantee from the venue.
posted by damn dirty ape at 7:25 AM on September 24, 2008

Totally tangential, but if a band (especially one of the midlevel bands) gets a following/chance to tour in Japan, they're pretty much guaranteed to pull in some good cash, given the price of tickets here. I've paid 6,000 yen for Less than Jake, 4,000 for Ani Difranco, and over 10,000 for an arena concert where punk bands played half sets (roughly 7-8 songs), in addition to having other concerts arranged close to the big show (bands like Bad Religion, Zebrahead, and MxPx). From what I understand, the bands have absolutely nothing to do with ticket sales, and are guaranteed a flat rate, and then whatever merch they can sell (and in Japan, being a fan means buying absurd amounts).

Some bands (Zebrahead, for instance, the my-god,-they're-still-together Color Me Badd for another) have rabid followings here. They come over once a year or so, play six or seven concerts, are mobbed by adoring fans, then go home a week later. Must be a pretty decent life.
posted by Ghidorah at 7:31 AM on September 24, 2008

Interesting related anecdote, I think: Most every year I go see Lyle Lovett at Wolf Trap and I sit in the assigned seating at a price of about $38. They also sell lawn seats for about $22. With about 3,000 seats and another 3,000 lawn spots it's a total that is way above the $12,500 in an example above. Yet:

The Large Band is very expensive to keep on the road. Lovett essentially plays five nights to break even, then makes his money on the sixth night.
posted by phearlez at 8:32 AM on September 24, 2008

What? You're crazy. :)

Okay, fine. We'll use your numbers.

Let's say the the band had a $12,000 guarantee, plus a 50/50 split on top. That's $12,000 + 50% of the overage, which is another $8,000. $20,000 for one night.

The Faint played 20 domestic dates on their last tour. Let's assume that they sold out every single one of them and got deals just like you describe. (I'm leaving out the overseas dates b/c as others have said, they're more lucrative, but they're also far more expensive to get to, so too many unknown variables in play there.) That makes $400,000, but the whole point here is that they are GROSSING $400,000. The touring operation is at least as many people as are in the band over again, plus a bus and/or flights, plus gas, plus hotels, and so on. It would be remarkable if they were netting half of the gross there. So a mid-major band that can sell out a 1500-seat arena might be able to give each band member $50,000 THIS YEAR. If The Faint are like most bands even at this level, they won't be able to mount this big a tour a couple years down the road. And all of this is assuming they sell out venues three times the size that the original question actually posed.

I think damn dirty ape and others have made the real point here - there's a tipping point after which you make scads of money and tons of bands fly well below this and skim along a little above break-even.
posted by el_lupino at 11:57 AM on September 24, 2008

Actually, speaking of damn dirty ape's mention of MBV:

"Kev notes that, for the band's recent tours, they've spent £200,000-- $366,000 U.S.-- on equipment. He also admits to owning "hundreds" of effects pedals, but only using a mere 30 on stage."
posted by el_lupino at 1:25 PM on September 24, 2008

el_lupino: I never once mentioned that bands are currently rich, or on their way to being rich. I was merely refuting your assumption that only "a few dozen" bands net maybe "$2,000 a night" which is completely wrong.

And FWIW, we booked the Faint several times in the 2-3 years I was booking shows back in the early 00s. They were selling out shows then, and still are now. It's more common than you think.
posted by nitsuj at 6:35 AM on September 25, 2008

...a mid-major band that can sell out a 1500-seat arena might be able to give each band member $50,000 THIS YEAR.

And that's before health insurance!
posted by grateful at 12:30 PM on September 25, 2008