10 Basic Economic Rules for Cover Bands

Being a musician for most of my life – playing in both cover and original bands – and later, owning bars and venues and of course working in other aspects of the music business, has given me a unique bit of knowledge of basically being on “both sides of the fence” so to speak.  One one side, being in a band that wants to play and make money, and get their name out and build a fan base.  On the other hand, being a venue owner that depends on music to help attract business.

In that spirit, I have put together a list of things focused on the economic realities that will help you if you are really interested in playing in clubs and getting your band out there.  Of course, if you really want to do this, you really must treat it as a business.  Don’t be a drunk idiot, only out to get as much tail as you can get, or see how drunk you can get before you pass out on the stage in your own vomit.  But, I digress.  Read through these ten simple rules, below, and your life will be much easier and you will likely experience much more success in your endeavors.

1. If you have a band, particularly a cover band – looking for a “guarantee” – don’t bitch if your pay is too low when you only manage to bring a few people out to your shows. Clubs that book cover bands are businesses, and they pay money out for bands who will help bring business into their establishment. They are paying you as an investment to help increase their sales, not as an expense that leads to a potential loss. You *must* bring something to the table.

2. Just because the club lists you in the entertainment guide or on their website, doesn’t mean that you automatically will have a big following. This takes hard work, and all of your band members must participate. You need to promote yourselves to build your following. Stop by every table and thank who came to your shows – yea, talk to them! Flyer the venue. Post ads on Facebook (oh my God yes, that might mean you have to actually spend money!) Use social networking (but don’t rely on it alone). Make an effort. Even if your “following” isn’t as large as it needs to be, I promise you that the venue/club will remember that you at least made the effort. Do what you say you are going to do, too. If you make big promises to the venues that fall through, that’s not nearly as good as underpromising and overdelivering.

3. If you think so highly of your band and you believe you are worth more than you are being paid, make a door deal with the club/venue and waive your guarantee. After all, if you are a bona fide rock star, your throngs of followers will no doubt come and pay good money to see you, and you will make a killing.

4. Don’t get hung up on how the club/venue is “screwing you over” if it is part of a corporate chain. Most corporations have definitive limits on what they allocate for entertainment. It is what it is, and until it changes, that’s the way it’s gonna be. The reason these places exist and continue to exist is because they have figured out the economics so that they can continue to do business. In other words, every time they book a band, they take a risk (see paragraph one). So if they have five proven bands that draw well, and several others that do not, the established economic guidelines help to ensure they don’t lose money over time, and hopefully make a profit. So – if you don’t like it, then don’t complain about what they pay and don’t play there. Find somewhere else to play.

5. If you are a new band, and you have not yet established yourself – even if you have players who have played in other bands – you can’t expect top dollar. Make a deal the first time in. It’s not a sin, I promise. It’s a show of good will, that you understand the club needs to make money.  Of course, there are exceptions, when say there are five guys who happen to play in road bands or who have been around long enough to each have a nice fan base, but most of the time this is not the case. And – by making a deal first time in, you are *not* selling yourself short. You are showing goodwill. I’ve done free shows before and I have no problem making this investment to help get established.

6. Club owners are not impressed with drunk musicians that are being PAID to do a job. Stay off the booze and the dope at least while you are performing, or at least maintain until after all is said and done.

7. For crying out loud, do NOT argue about your bar tab!  I’ve seen this a million times, including back in the day in my own band (said musician was immediately fired). Seriously, you won’t get booked again. Don’t be a douche. And definitely, don’t walk your tab, If you do, call or go to the venue and apologize profusely and pay it! Nothing pisses off a venue more, and at the end of the day, the bartenders/waitresses do have influence – their opinions count.

8. Don’t be so pompous that you say “well I hate this owner” or “won’t ever play there again,” etc. You know, it’s kinda small out there in the real world. You never know if the owner you “hate” might open the next big club, or maybe the manager that “screwed you on your tab” could open their own establishments.  Moreover, most venue owners in a given market know each other and likely talk. There are limited resources in each market – always keep that in mind.

9. If you don’t like the pay scales in your market, seek out venues in other cities. There are plenty of places to play outside of your area that would love to have a good band. But remember – if you do not live in that area, the first time you play you are going to have to make a concession, unless you are Bon Jovi or the Foo Fighters. You will need to make the effort to promote heavily, get a decent crowd the first time in, and make sure you leave the place raving about you, so that next time, your following (and your money) in that market goes up.

10. The Golden Rule. If you are “too big for your breeches” then there is always going to be someone hungrier out there that will gladly take your place if you pass up an opportunity.  Therefore, pick your battles carefully. You can either make a deal and build your reputation and following (sometimes it takes a LONG time), or you can sit your ass home on a Friday night when another band that you think “sucks” is taking “your” slot.  Always be humble and build respect through your actions.  Boasting about how good your band is will not get you anywhere.  Prove it.

These rules should help set your expectations and the realities of working in the music business at the club level.  If you want to get serious about it, you should pay close attention to them.  And remember:  There are many more bands out there looking for good gigs than there are actual places to play.  It is the law of supply and demand, and it is competitive.

Stay tuned… there will be more in this series.

©2018 Zach Bair

It Is Time for Performance Royalty Reform – Soundstr is Here

Last week, my company took a monumental step toward protecting the rights of musical artists and writers, by acquiring Soundstr, technology that, in a nutshell, will help reduce music licensing costs in bars, restaurants, radio stations, and many more businesses, and will in turn also help increase the number of businesses who are licensed.  This has been a passion project for me for some time, driven from personal experiences and my almost lifelong desire to help musicians.  This is the story of the more recent events.

About two years ago, I had simply had enough.

It seemed like every other day, my venue was getting calls, letters or even visits from every single one of the three major US PROs – performing rights organizations.  The message was clear:  agree to a “blanket license” and pay a large sum of money every year to each of the three major PROs, or face a potential copyright lawsuit claiming tens of thousands of dollars in damages.  As many bar and restaurants will tell you, this is a heavy-handed tactic that has been literally going on for years, and scares the hell out of most owners and even puts some out of business (yea, that helps musicians).  But unlike many of my fellow bar or restaurant owners, I’ve been working in the music industry for a long time, and had a good bit of knowledge about rights management, through my work with DiscLive.  So the first question I asked these folks was “how do you know what songs are being played on a nightly basis, and how do I know that the money I am paying actually goes to the artists and writers that deserve it?”  The answer was always “that’s not my department,” or something along the lines of “we have a formula that calculates that.”  In other words, they have absolutely no clue.

And that’s not good enough.

As I learned, there is and was no way for the PROs to truly know what is being played in these businesses, so they just go for the throat and demand a blanket license, which means that the business must license that PRO’s entire catalog in the off chance that a work under their stead is played.  As noted, this is already a huge issue with business owners, and several organizations such as the Fairness in Music Licensing Coalition, to which my company VNUE is aligned, are working to change this.  An even bigger issue, I learned, is that artists that I personally know and associate with have not been paid for public performances of their work.

At. All.

So, already frustrated about the repeated calls and harassment by these organizations, I used my technology and process engineering background, wrote a patent for a system to solve this problem, filed it with the USPTO, and set about starting to publicly evangelize the need for a change, all while working on the technology design for our solution.  Along the way, I was introduced to the FMLC (above), and in turn, they introduced me to Soundstr.

Soundstr is a Cincinnati-based startup company that was started by Eron Bucciarelli-Tieger, who gained notoriety by being a founding member of platinum selling band Hawthorne Heights.  Amazingly, much like I had approached this issue from frustration of how my venue was being harassed, Eron had approached this same problem from a different angle – from that of the artist – and had in fact already come up with some nifty devices that go in venues to track music plays.  He found out he was not being paid from his public performances.  And, frustrated from the “non-answers” he was getting, he also decided to do something about it.

Call it an alignment of the stars, or possibly a burgeoning rocket sled that cannot be stopped, but after several months of work, Soundstr is now part of the VNUE family, and we are about to seriously blast off with a combination of the Soundsr Pulse™, pictured below, and the additional system designs and processes in our patents.

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Soundstr Pulse™

And all of this gets me very excited.  Not because this is going to be ridiculously big – and it will – but moreover because I know that we are about to inject a massive change into an industry that hasn’t budged in 50+ years.  In fact, the basic “general licensing” model has been around since 1847!  According to research conducted by Soundstr, in that year, French composer Ernest Bourget, along with other composers, witnessed their music being used without compensation in a popular cafe.  They successfully sued and won a royalty settlement.  In 1851 they founded SACEM, the world’s first PRO.  In 1914, one of the first big American PROs was founded, ASCAP.

Now there is no question that PROs do a good thing, by helping to protect artists rights.  However, there is a lot of murky accounting that no one really knows about and a big part of that involves general licensing royalties ($3B globally by the way).  Remember – this is what the PROs charge for playing music in music venues, bars, nightclubs, coffee shops, etc.  And this needs to be updated to 21st Century standards.

Here is a great example of the problem.  It stems from the main issue that if the song is not being actively played on the radio and/or the artist is not in the top touring artists list as published by several industry trades, the songwriters and artists won’t get a royalty for their music being played in a venue or business (again, murky algorithm alert).  Soundstr recently conducted a small study to highlight the problem.  They surveyed 12 businesses over a two week period, to see what music was being played and identified almost 3000 songs.  They compared that data to Nielsen radio charts for the same time period.  Only 19% of the music being played in the venue was actually getting any radio airplay at all (this is also not weighted data, mind you).

This means for the whopping 81% of the music being played in the businesses, the songwriters and artists were not being compensated.  And some of these were big artists.

Study

The problem extends further too, into radio itself.  Most stations are not actively monitored, and some PROs only take a small sample of data every quarter to justify the blanket license fee that is paid by the station to the PROs.  This fee can be up to 3-4% of the stations gross revenue – a huge figure in some cases (as in five figures or more).  The issue is that without knowledge of exactly what music is played, combined with the exact percentages of each song controlled by the PROs, it is highly likely that the PROs are charging for music they may not control and therefore justifying a higher rate to each station.  This is particularly true in the case of new, innovative PROs popping up taking market share away from the more established ones.

And, like the problem with venues, these fees are not properly applied to the songwriters and artists who deserve it, and stations are in some cases vastly overcharged.  We recently signed our first radio deal, and expect to roll out in July.

To be clear, our goal at VNUE is not to go to war with the PROs, but rather, introduce technology that will provide a much needed end-to-end transparent solution to this problem.  In turn, the goal will be to reduce operating costs for the PROs, reduce licensing costs to venues, businesses, radio stations, etc., and further, by having a lower price point based on actual usage rather than a blanket fee, encourage more businesses to become licensed.  And most importantly, ensure that the proper writers and artists are being paid.

It can be estimated that probably only about 20-30% of applicable businesses are properly licensed, even though the PROs typically claim more market share.  What that means is that there is a huge amount of revenue out there for songwriters and artists, just waiting to be tapped.  Our solutions will help to drive this additional revenue, and hopefully, remove the antiquated method of threatening lawsuits to become properly licensed.

In theory, Soundstr should be treated like a utility model – just like the gas, electric or water, which is a pay-per-use system.  Music is intellectual property and if it is a service, it must be paid for – fairly, and the same way: on a per-use basis.  But those who create it MUST be compensated, and there MUST be transparency.

So if any of you musicians or writers are reading this, keep this in mind:  If you have a song that was once on the radio, or popular enough for other bands to cover it, guess what?  You probably aren’t being paid.  Even if you have songs that play on the radio frequently, there is a good chance you are not getting paid.  Do you think the writers of “Mustang Sally,” notably probably one of the most covered songs ever, are getting paid properly?  Probably not.  But we don’t know for sure, because there is zero transparency.

To facilitate real change, you musos need to be vocal about this problem, because even with our technology, and our evangelism, this is going to be a mountain to move.  We must move it together.

You will be seeing a lot more of Eron and I in the coming months, as we continue our quest to get that mountain on the move, and I hope to hear your voices add to the chorus.

For more information about the Soundstr tech, and how it could help you as a musician or a venue/business owner, you may email “contact” @ “vnue” dot com.

Graphic source:  Soundstr

 

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