Monday, October 10, 2005

Making Money Through Touring

The Lefsetz newsletter today (http://www.lefsetz.com) argued that music will soon be free – or so close to free that no-one can profit from it – but the new indie model will rely on touring and merchandising. I’ve long thought this was the case, especially once you examine the economics of the digital download model. At 79p per track, that leaves very little margin for anybody, and personally, I think 79p is overpriced!!

 

But Lefsetz seems to neglect the obvious fact, which is that the live touring model only makes economic sense for large artist’s too. The “Who’s taking care of the rider” panel at ITC featured tour promoters and agents who said live shows only make money above 1,000 punters!! Well, it’s a massive leap from playing the Barfly to the Astoria, one most bands never make. And without marketing money and tour support from record labels how are artistes going to make that jump?

 

One of the things the promoters said was they are signing up new artists at an earlier and earlier stage of their career, almost becoming A&R. So, will agents and promoters start putting money into new artists? Developing them, getting them support slots, doing low level marketing using their vast databases? Or, when will a Major buy a promoter like SJM or ITB?

 

Million has worked with artistes on this issue and believe Majors still have a vital role to play. Our new label, Newbran, will license to a Major, despite all our reservations. But, by using the Internet to build a core fan-base, the deal will be on our terms. Better for the artist, better for us, and ultimately, better for the Majors since if they don’t do deals with labels such as ours, their future looks increasingly less certain.

 

 

 

 

4 comments:

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