Live performance is obviously a key revenue stream for many artists – and the most obvious way that gigs, tours and concerts make money is through the sale of tickets.

When an artist is booked to play a show by a venue or promoter they might be offered a percentage of the money generated through ticket sales. Or they might be offer a fixed fee for their time – though this fixed fee will be very much linked to how much money the promoter expects to make on ticket sales.

They might be offered a percentage of the money generated through ticket sales, but with a minimum guarantee, so whatever happens on the night they are guarateed a minimum payment.

It’s important to remember that there are other ways artists make money from their live shows – and for those playing grassroots venues, it’s often the other revenue streams that help artists make a profit.

Shows provide a great opportunity for artists to sell merchandise to fans. At a grassroots level artists or their team will usually run the merch stall and get to keep any monies generated. At bigger venues, the venue might help run the merch stall, but will then usually take a cut of the money in return.

If an artist performs their own songs, then additional royalties are due, because the venue or promoter of the show is staging a performance of those songs. Those royalties are usually separate to any other fees or share of ticket money the artist receives and will be paid through the collecting society PRS.

Venues and promoters also have other revenues in addition to any cut of ticket sales they receive. That includes the sale of food and drink, plus brand money through venue and event sponsorship.

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As an artist’s career progresses they will work their way up the live music ladder, playing bigger capacity venues – from pubs and clubs through to arenas and stadiums – and appearing higher up the bill at festivals as their fanbase starts to grow.

There is a lot of economies of scale in live music, which means the bigger the audience the bigger the profit margin. Of course some artists will put a lot more into production for bigger shows on bigger stages, but the real challenge is making a profit when you are playing to 60 people a show.

At that level it is really important that the artist minimises their costs, and also maximises merchandise sales and collects any song royalties they are due, in addition to any fee, to ensure they go into profit. It’s also important to treat every gig as a fanbase building opportunity, encouraging audience members to check the artist out online, and follow them on streaming and social media platforms.

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PUTTING ON SHOWS
One challenge for new artists is proving to venues and promoters that they can pull an audience into a show. How can can an artist prove they can do that until someone books them to play a gig?

One option is for the artist to stage their own show. So, after playing some open mic nights or guest spots, an artist might organise their own headline show, usually in their local area. Grassroots venues will often offer artists very good deals for shows like this, especially early in the week.

The artist then needs to do some good marketing, fill out the venue and put on a great night. They should also document the whole experience, publish footage from the night on their social channels and website, and use it to persuade other venues and promoters to book them to play.

If an artist stages their own show, they need to be very clear when booking the venue what each party is bringing to the table – ie what services and equipment will the venue provide as part of the booking?

Indeed, even when artists work with promoters, they need to be very clear on what the promoter and venue will provide, and what the artist needs to provide. Assume nothing! Identify everything that is required for a successful show and be clear on who is taking responsibility for what.

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BUSINESS PARTNERS
As soon as artists start playing other people’s shows, clubs or festivals, they will be working with business partners in the live sector, including promoters and venues.

The promoter is usually the financial risk taker on a show. They guarantee the artist a minimum fee. They book and pay for the venue, put the tickets on sale and work with the artist on marketing. Promoters also often have their own marketing channels via which they can sell tickets.

Artists will initially build their own relationships and negotiate bookings with promoters. Though as an artist’s career progresses, they will probably ally with a booking agent. The agent then looks for opportunities for the artist to play live – utilising their contacts – and then negotiates the deals with each promoter, and advises the artist on how to grow the live side of their career.

Other business partners on the live side obviously include everyone involved in the production of each show or tour, some of whom will work for the venue, some for the promoter and some for the artist. Then there is the ticket agent, the company that facilitates the sale of tickets. As well as providing the platform where tickets are sold, ticket agents may also help with marketing and cash flow.

For those looking for a career in the music industry, promoters, venues, booking agents, event production companies and ticket agents are all possible employers.

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