The Financial Conundrum of being a Live Indie Performer in the Digital Age

I’ve long kidded that the reason I got into music is that when I was young my parents told me music wasn’t lucrative.  I was just starting Sunday school and they had talked about lucre and how lucre was a bad thing, i.e. filthy lucre. If lucre was a bad thing I reasoned that anything lucrative must also be bad and music WASN’T lucrative therefor it must be good and a worthy pursuit. Right? That was sound reasoning wasn’t it?  Ah youth and naiveté. But I’ve never thought of playing music as taking a vow of poverty either. I was smart enough to know I wouldn’t get rich or make nearly the amount of money I had as an executive recruiter, but when I started out touring nationally in the mid 90’s things were working out. I wasn’t filling rooms like I’m doing now on a semi-regular basis, but the folks that did come were a huge support and bought my CDs.  Tickets to my shows were $10-$20 and if I didn’t get a guarantee I would typically get 70-80% of the door.

Here’s the thing. When I got in the business CDs sold for $15 and tickets to my concerts were in the $10-$15 range and, as I said, I retained 70-80% of ticket sales plus 100% CD sales. Over 20 years later CDs are sold (ha! more on that later) at the same price of $15 and the tickets to my concerts have gone from $10-$20 a ticket to $12-$25 a ticket. But here’s the kicker; rooms are by and large keeping 40-50% of the door instead of 20-30%. Why? Because their costs kept going up, like everyone elses, but instead of passing the costs off to the consumers by raising prices to appropriate levels they’re making up most their revenue from the artists who are bringing people in as opposed to their customers.

I’m an old business major, so let’s look at the true value of those dollars and how revenue compares from a ’95 concert to a ’15 concert. For the purposes of this exercise I’ll compare ’95 dollars to ’15 dollars. For those of you who want to do the math along with me, a ’95 dollar translates to $1.57 in 2015.

So let’s take a look at a typical gig, and to keep it simple we’ll just use 50 in attendance and use the bottom end of ticket range. So, let’s say 50 folks come to see me at a show with $10 tickets and I get 70% of the door, or $350 in ’95 dollars. The same gig today would have 50 folks at $12 a ticket and I get 60% of the door or $360 in 2015 dollars. Folks that’s not a raise, remember the ’95 money is worth more than 2015 money by a lot. Again, just in keeping up with inflation the door take should equal $550 in 2015 to equal the $350 in ’95 money. That $360 figure represents a 35% decrease in ticket revenue for the artist. The venue received $150 in ’95 and $240 in 2015 and when factoring inflation the 2015 venue has received a real money increase in revenue of about $20 per show. Venues aren’t getting rich, but they’re doing better than the artist, and the consumer is getting an amazing value, some might think too good of a value.

Alright, let’s talk CD sales at live events and how that’s changed over the years. There are a variety of ways that musicians make money from their recorded works, but for this discussion I just want to focus on the aspect of live music sales.  When I released my first CD I would sell approximately one CD to 25-30% of the total audience at my concerts, sometimes more, rarely less. That number went up to 30-35% by the time I released my third solo CD, and when I teamed up with Joe Ebel for a couple of years and two CDs we averaged 35-40%.  Today I am lucky if I sell 10-15% and I have five solo CDs.  So let’s take a look at these live gigs again and compare some numbers. I’ll use the low-end estimates for both to get my money figures again. So, 50 people come to a concert and in ’95 that equals 13 CDs sold (I rounded up) or $195 making the ’95 gig worth a total of $545 in ’95 money or $855 in 2015 money.  In 2015 I’d sell 5 CDs for a total of $75 making my grand take from the gig $435. That represents an almost 50% decrease over a 20 period of time for me in real dollars at an ‘average’ gig.

So, what to do?  I’ve always been a fan of the Serenity Prayer; grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.  While the easy answer is to blame it on technology for robbing us of CD sales I can’t change that. Technology always has and always will have an impact on the music business and how music is recorded and distributed. And there are always positives and negatives with new technology. Who among us doesn’t love that they can carry around a music catalog lovingly put together over four decades on a device that fits in their pocket?  We can’t make people buy a dying medium.  In a handful of years selling a CD will be akin to selling an 8-track tape. What are you going to play it on? They don’t put them in cars anymore and most new computers don’t use them.

OK, I can’t change the digital vs. CD distribution paradigm, nor can I wave a magic wand and bring back demand for the CD, but I can change a couple of things, and venues can too.  First, as a largely ceremonial gesture, all my CDs at concerts will be sold for $20 each and I’ll explain to the audience why. If I sell exactly the same amount of CD’s at concerts I’ve given myself a 33% raise for a couple of years or so.

The next thing I can do is ask for higher ticket prices at my concerts. So this is where it’s going to take some courage. But from a purely objective standpoint a Ken Bonfield solo concert should have an inflation adjusted ticket price of closer to $15-$35 and just a thought, but I’m actually a lot better than I was 20 years ago, so you could argue I’m due a raise.

I’m not unwilling as an artist to share the burden in a changing economic landscape, nor am I asking for the business to return to ‘the good old days’, but I am asking that we don’t take everything out of the musician’s portion and that we apply some basic Clintonesque math to the live music equation. For those of us that run concert series I think it’s incumbent upon us to inform concert attendees what the economic realities are for touring musicians and price our shows accordingly.  I really don’t think a $3-$5 uptick in ticket prices will destroy the acoustic music world, but it would go a long way in helping artists eke out an increasingly difficult economic existence.

It’s really kind of silly to think that a night of acoustic music in 2015 is worth 40% of what it was in ’95.  But that is what the numbers tell us.

I welcome thoughtful conversation on the topic.

Cheers, kb

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2 thoughts on “The Financial Conundrum of being a Live Indie Performer in the Digital Age

  1. Good analysis, Ken. I often massage numbers in the same way for books. The big difference between you and me is that musicians have a ready-made forum for their music, i.e., clubs, etc., while we writers have very few, and readers don’t turn out in the same numbers as for music. But enough of that.

    I’m wondering…is there a way to judge how much you would have to charge in music venues to retain the same number of attendees, i.e., would you only draw 30 at $35?
    What about promotion? It’s a cost, but how much benefit would you gain from ads, mailers, flyers?
    Since you are in control of your own music, are there ways you can sell digital copies at venues? How much cost would that entail?

    Like

    • Thanks Bob. As to a few of your points. I’ve only gotten a couple of venues to buy into the idea of raising prices, both were successful. What I know about my demographic is that it’s 45-75 years old, well-educated, well-healed, and most have a ton of disposable income. For most of them there’s really no effective difference between a $15 ticket and a $25 ticket. But most venues control the ticket price with only minor input from the artist; especially those of us who play the indie circuit. There are many venues in that world that are publicly and vocally proud of how they’ve kept the cost of music down by keeping ticket prices down. The problem is their costs haven’t gone done in the past 20 years so instead of taking 10-30% of the door they now take 30-50% of the door. Effectively putting the burden of inflation all on the musician.

      Regarding digital sales at shows. For one year, 2010 I believe, I peddled thumb drives with different collections all at great price points. In fact, I offered the thumb drives with both AIFF/WAV files, CD quality, and mp3 so that they could choose. They were always a big talking point at the CD table, and I heard many folks say what a great idea it was, but not one person bought one. Those that bought all bought CDs. Odd eh?

      Regarding promotion. This is something I’m actively researching. But it will definitely cost, and it will be $$$ to $$$$ not $. And it will be both a time and money commitment. I know enough about marketing and PR to know that whatever you do you have to do for at least a year, if not two. So in addition to some other ideas I’m pursuing I’m adding promotional expenses to a business plan I’m putting together over the next 6 months.

      Thanks for the thoughtful comments and ideas.

      Cheers, kb

      Liked by 1 person

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