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Making Money off Touring (the right way...)

Discussion in 'Miscellaneous [BG]' started by hrodbert696, Dec 13, 2013.

  1. hrodbert696

    hrodbert696 Supporting Member

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    Prior thread got deleted, rightly, for copyright violation, so let's reopen the discussion by doing this right:

    http://www.metalinjection.net/its-just-business/bands-money-touring

    Summary of the article: The author goes through the finances of a "mid-level" touring metal band on the road. On his calculation, a gross take of $600/night (half guaranty, half merch) ends up yielding $13.12 net per band member per day after you deduct merch fees from the venue, managers' and bookers' commissions, gas, etc.

    Ok, my take - not sure what constitutes a "mid-level" band. The author's band, Oh Sleeper, is a Christian metal outfit, which I know has a market but as far as I can tell would be a pretty tight niche - I know I'd never heard of them.

    The article was written in 2010, at which time Oh Sleeper had released one EP and two albums. The first album didn't chart, the second 120 on the Billboard 200 and 12 on the US Hard Rock chart. Since then, they released a third album which peaked at 142 on the US chart but hit #1 in the hard rock category. Not sure if that means sales rose or fell - was there stiffer competition nationally and weaker competition in the niche category? In 2013 they were able to raise over $50,000 by crowdfunding for their next recordings.

    The point of all that being, if the article were updated now, how would it compare? Clearly a band touring after a couple of albums that barely scratched the market is not making money. Do those tours pay off in terms of a growing fan base? Have the numbers improved?

    For instance, he says that in 2010 they averaged $300 in merch gross sales per show, selling Tshirts for $15 each. That's a whopping 20 shirts sold per show. Supposing they sold those shirts for $20 and sold 30 per show. That would double the merch gross to $600. Subtract the $7.50 wholesale cost per shirt, a 25% venue merch fee on the gross and a 15% manager's commission on the profit, and by my calculator they've got $191.25 in net income for the band rather than the $63.75 they were actually experiencing in 2010. That would be $31.88/night for each band member from merch rather than the $11.15 the author gives. Still not very good money, but a big improvement.

    Part of the issue also is that it's a six-member band. If they were an equally popular power trio you'd double the money per band member. I realize now there's a practical reason why Rush tours without an opening act. It's smart business.

    I think the bottom line is that no, you won't make any money, not even support yourself, in an original Christian metal band that grosses $600 a night with all these fees and expenses to meet. Better off playing in a cover band getting $100 a man without the overhead. But if you get just a little traction, the numbers can start to improve. In merch at least, doubling the gross tripled the net. Those early tours are for the dreaded "exposure" to build a fan base (which originals need in a way covers don't), in order to get the numbers to start curving up in later tours.

    Incidentally, I just compared this Oh Sleeper band's charts with the Black Keys. The Black Keys were at a pretty similar level at the same stage; zero charting with their first two albums, third (Rubber Factory) made it all the way to #131, Magic Potion to #95. It was only their fifth album (Attack and Release) that cracked the top 20 and then of course Brothers went platinum and hit #3, 8 years after their first album came out (compare to the Beatles, for whom 8 years was their entire recording career together!). But then the Black Keys only have two guys to split the net, not six.
  2. fdeck

    fdeck Supporting Member

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    Disclosures:
    HPF Technology: Protecting the Pocket since 2007
    More profitable than Amazon. ;)
  3. T-Bird

    T-Bird

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    Hi.

    Oh, that was the reason, not the general posting habit of that said OP?

    For the last past few days anyway ;).

    The numbers have probably gone up quite a bit, but I'd assume the figure below the line has remainded pretty much the same.

    As anyone who have tried know, the few years after the "break through" in any business are the most tricky ones.
    One has to invest at least the double they did before while maintaining a controllable growth, so the net profit may still go down.
    There has to be reserves to tap on.

    If the business model or idea is a lucrative one, competition will arise.
    Competition that may have a substantial monetary backing behind them, not to mention better resources.

    Also, in the case of the business being entertainment, not all the venues that made the growth possible are able to hire the artist anymore for capacity reasons if not for anything else, and the bigger ones usually demand a bigger cut or a worse deal than the small places accepted.

    IMLE, unless the band is dragging dead weight for some reason, the cut/member is pretty much the same in regular rock/pop bands.

    Only possible for acts that are either delusional about their ability to draw a crowd, or in Rush's case can sell the venues full without anyone else coming to share.

    A good percentage of support acts pay for the headliner for that support slot though, for the exposure boost it gives (real or not).
    Plus a percentage of the merch sales as well, of course.
    If the main act chooses the support act wisely, having them on tour is a huge monetary win for the main act.


    But probably not getting 3 times the cut of a member in a 6 man band?
    The touring costs are roughly the same anyway, unless every member wants a luxus hotel room of their own at every venue.

    IMO/IMLE, the number of band members matters only to the bands ability to keep the same line-up.
    More than 4 members, and someone -cough-bassplayer-cough- is coming or going at all times.

    Or the lead singer leaving to greener pastures.

    Regards
    Sam
  4. duff beer

    duff beer

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    If a band is selling 30 T-shirts at $15 each, raising the price will likely mean a drop in sales. Expecting a 50% increase in sales after raising the price is a fantasy.

    Rush doesn't need an opening act because they sell out on their own and have a vast catalogue of music to choose from. Band members have said that when they prepare a set list for tour it starts at 5 hours or more before they start to eliminate songs.
  5. hrodbert696

    hrodbert696 Supporting Member

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    I'm assuming that the band is building a fan base and becoming more popular from one tour to the next - not that they could have sold more t-shirts on that 2010 tour with an increased price. If more fans come to the next show, and are more rabid, they will be more excited to buy merch and willing to pay more for it. My point is that the 2010 snapshot only captures one moment in a band's potential curve over time.

    Sure, the whole setup is different. What I'm talking about is planning a tour around the economics. I don't think opening bands usually add significantly to a tour's "draw," they are there to "warm up" the crowd for the headliner so that people go away from the show more pumped for the NEXT tour. I'm sure there's a business element to Rush's decision to warm up the crowd themselves, so to speak - not that they have so much music (lots of bands can do a 3-hour show, but still use openers), but that they can count on a very loyal fan base that doesn't need to be "warmed up" by an unknown act, and it's one less expense. There was a report a year or so ago about profitable A-list tours, and the main news item was that Bon Jovi made more of a profit than Lady Gaga in her prime; the reason being that Bon Jovi had a stripped-down show with just six performers, and a stage that allowed them to play in the round (thus selling more tickets), while Lady Gaga had a massive cast of dancers and such, props, costumes, yada yada yada. Her gross receipts were higher but her net was lower as a result.

    Another factor on that original article was that this was a four-band tour. Assuming they all had about equal draw, presumably the $300 guaranty and $300 in merch sales were each about a quarter of the totals per night - the total show may have brought in $1200 in guaranty and $1200 in merch sales. So again, if a band built enough of a fan base through that kind of tour to come around next year on just a three-band, or two-band tour, let alone as a solo headliner act that could carry the show themselves, the revenue situation would look very different.

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