MU50167E Session Script

Session 7 Promoters Costs for Small and Large Scale Shows

BOLD MEANS ADVANCE THE PREZI
In your previous sessions you have studied the booking agents, the promoters and have
understood the relationship between them. You will gain further knowledge about the
promoters and their costs in this session, which will help you to critically examine the role of
the concert promoter in helping to break new artists.
You will examine the role of the promoter in this session, which has three parts cost for
small shows, costs at a larger level and using the small promoters and shows to
break an artist.
Reading the available literature (Baskerville, 2013) (Passman, 2014) (Waddell, et al.,
2007) would lead one to think of live being all about selling out stadiums and arenas. Indeed,
a recent series of articles in the Guardian newspaper was all about putting on large scale
shows, and interviewed various promoters, booking agents, sound engineers and other
people involved in stadium and festival shows.
And lets not forget the quote featured in the last session on promoters:
The promoters role has become more like the old record company role. We
do a lot of groundwork with the bands from the beginning, we work a band, do the
press, TV, radio, set ups; that is a big change. Thomas Johansson, Live Nation.
(Austin, 2013).
But it is unreasonable to expect any act to go straight to stadiums or arenas in their own right
that is headlining those types of shows. Or is it?
The screen shows an extract from a presentation to investors given by Live Nation in 2010.
(Live Nation Entertainment, 2010), and contains the concert promoters idea of how bands
progress in the live part of the industry, compared with pre-1999, AKA the old days.
What it does not show is what happens to the artist after the third month, i.e. after they have
sold out an arena.
In any case, if the artist and their team seeks longevity for an artist, they must look to the
long term and build up fans beyond an initial 10,000-20,000 tickets after 3 months.

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1. The small shows

The definition of a small show for this session is a venue with a saleable capacity of less
than 500 people.
Study the settlement shown on the screen. This is the report that the promoter gives to the
tour manager after the show. It should detail the number of tickets sold, at what price, and
therefore how much money is available to be split between the promoter and the artist,
depending on the type of deal the promoter had with the artist.
In this case an outside promoter, Goldenvoice, promoted this show at the Exchange in
Bristol. The saleable capacity of the show was 220, and it sold out.
Study the figures.

How much money did the Bristol Exchange make from this show?

How much money would they have made if they had promoted the show, and not
Goldenvoice?

Consider the flyer for upcoming events at the Exchange.

DISCUSSION:

Ticket prices what price can the venue in this city bear?

Will every show sell out?

Is every show an in-house promotion or are others (Goldenvoice, Live Nation etc.)
going to be promoting their shows there?

Ancillary income
Small (<500 cap) venues must have other ways of making money. An example is cloakroom:
1 per item. It is accepted that one third of concert goers will pay for to check in their coat. In
That would be about 70 people the case of The Exchange in Bristol. The venue would have
costs of one person as a cloakroom attendant for 5 hours at minimum wage (18-20 is 5.30,
21+ is 6.70). That leaves approx. 40 profit.
Other examples?

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2. BREAKING A BAND USING SMALL SHOWS

The classic way to break an act is to get them into small venues, working hard and learning
their craft, as you have examined in previous sessions.
This strategy relies on having venues to play in, and promoters willing to take the financial
risk on acts that they quite simply, have never heard of.
Sidebar venues at risk
Picture of Ed Sheeran.
The screen shows a picture of Ed Sheeran, a successful singer songwriter. Why? Well Mr.
Sheeran has been used as an example of how grassroots venues are under threat and that
without them, artists such as Ed Sheeran, would not have achieved the success that they
have today. You can read all about the problems and possible solutions in this report; Ed is
also used to highlight how promoters take financial risks with unknown artist and are not repaid further down the line.
The artist team therefore relies on the promoter(s) to agree to put a shows on sale, knowing
that it will be very difficult to sell tickets and very difficult to make any money. Which is fine if
you are a national promoter with a lot of shows, large and small, but not if you are the inhouse promoter at a venue such as the Exchange in Bristol.
Artist team (Booking agent) Promoter Ticket buyers?
What happens if the show/tour does well?
At a basic level everyone is happy. But the promoter has probably taken a risk and may
have lost money, even if the show sells out. It is also very unlikely that they will be able to
book that band again if they are an in-house promoter at a small venue the Ed Sheeran
principle.
A regional or national promoter will be able to promote the band next time in a larger venue
either as a dry hire or in one of its group venues. (An example would be DHP Family,
based in Nottingham).
And the booking agent counts her commission
What happens if the show or tour does not do well?
What do you think?
There has to be a better way.
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There is little or no incentive for venues or in-house promoters to take national acts at an
early stage, other than the kudos of being the first to promote them. As soon as the act sells
out the Exchanges of the circuit, they will be booked into larger venues, often by a national
promoter.
Venues or in-house promoters will then not take a chance on talent, unless pressured by the
booking agents. There are no guarantees as to how well a band will actually sell.
Enter data.
In an article on Music Business Worldwide, Sammy Andrews, Head of Digital at Cooking
Vinyl, argues that promoters (and other invested parties) should be given access to data
about streaming activity, in order to make better decisions about bands popularity.
You have examined services such as Buzzdeck, which can help artist teams to identify
areas of demand. Other services, such as Artist Growth, enable artists to upload
information about ticket sales and merchandising income to interested industry partners,
such as Sony; the idea being that the labels can monitor an acts popularity, beyond mere
clicks of the mouse.
So, how does this help with breaking small acts?

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3. Large shows
Baskerville, (2013) offers the following preliminary considerations for the promoter:
1) What are the artists fees and available dates?
2) What are the possible venues?
3) What does the venue offer?
4) What is the gross potential?
Overall, gross and net potential are obviously higher for large venue shows. Margins still as
small, but the profit potential is higher.
Budgeting
The promoter will have to budget carefully for a large -scale show, as the gross potential is a
lot higher compared to a small-scale show. The objective of 'budgeting' is not to lose
money. A budget may be in place. i.e. the organiser has a certain amount to spend, or
costs will need to be worked out in the same way you have previously explored.
A fixed budget for costs may come from a variety of sources, including investment, profit
from previous events, or sponsorship. Sponsorship is always seen to be attractive,
especially to organiser/promoters of large-scale events, as the scale can attract major
consumer brands, who potentially have large amounts to spend on sponsorship. However,
sponsorship must be a good fit with the event, and vice-versa. Wireless Festival,
previously in Hyde Park and recently relocated on Finsbury Park, has had four major
sponsors in the last six years. Did the sponsors have problems with their association with
Wireless? Or were they simply not seeing any return from their investment?
Income
Tickets will always be the primary source of income. However, some large-scale music
events may not sell tickets (Norwich Pride, Radio 1 Big Weekend), relying instead on
sponsorship or state aid. These types of events will want to help augment the sponsorship or
aid by incorporating other, non-ticket, revenue streams. Most music events will offer some
of programmes, concessions, car parking, and VIP upgrades to boost income alongside
ticket revenue.
Costs

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You know that the gross potential, minus the costs, gives the net profit that can be divided
between the band and the promoter. You also know that the costs can be influenced by the
demands and requirements of the artist. At a basic level these requirements should be
indicated in the artist contract rider, a document that instructs the promoter on the
associated production costs she may incur. Examples of production requirements (and
therefore costs to the promoter) include such items as the sound and lights needed, and the
catering and hospitality demands.
A show in a large venue, such as an arena (capacity of 10,000 25,000 people) may see
the artist creating or demand a complex production complicated set and stage, largescale video elements, even waterfalls (Kylie Minogues, Aphrodite: Les Folies Tour in 2011).
These elements may be impossible to cost, or may not have been realised, at the time the
show is agreed between the promoter and the artist at what point does the promoter then
agree to the extra costs associated with installing water jets and a lake on the stage?
Consider the video showing the load in and set-up of the set and stage for Muse on their
2nd Law tour of 2013. Typically, promoter costs for large scale shows include site,
infrastructure and health & safety. Which of those elements can you see in the video and,
more importantly, how much will they cost the promoter?
Cash Flow
Ultimately the costs of large scale show must have an impact upon a promoters cash flow.
The screen show s cash flow as applied to the organisation of a live event. A promoter will
incur massive expenditure, with no income, before a show goes on sale and will hopefully
have enough cash reserves to cover this expense.

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Works Cited
Baskerville, D. B. T., 2013. Music Business Handbook and Career Guide. 10th ed. Thousand
Oaks: Sage Publications, Inc..
Passman, D. S., 2014. All You Need to Know About The Music Business. 8th Edition ed.
London: Penguin Books.
Waddell, R., Barnett, R. & Berry, J., 2007. This Business of Concert promotion and Touring.
New York: Billboard Books.
Andrews, S., 2015. Streaming + ticketing + data: A new frontier for the music industry.
[Online]
Available at: http://www.musicbusinessworldwide.com/streaming-ticketing-data-new-frontiermusic-industry/
[Accessed 29 October 2015].
Hudson, E. (2014, March). Will You Be My Headliner? Available at:
http://www.accessaa.co.uk/will-you-be-my-festival-headliner/ [Accessed 29 October 2015].

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