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The Business of Music: 201

By Harry Schnipper

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AUTHOR DISCLAIMER: The Business of Music 201 is solely intended to be a basic business primer predicated upon my two previous articles which appeared in this magazine, but it is not intended to encapsulate our entire entertainment industry. Also, I am neither an attorney nor is this article intended to proffer legal advice. When in doubt always seek competent legal counsel.

The three themes of this article will touch upon are: (1) musical machinations, (2) the music industry as a machine, and (3) that there is no business in this business. In my two previous articles I capitalized upon quantifiable solutions, pragmatic problems, owning your own entrepreneurship, the presenter as a silent partner, the artist as a creative communicator, building your own business plan, branding your own musical identity, and the transferability of the above precepts on a market-by-market basis. Now we shall explore our own musical destiny.

The prevailing question that I have, as a veteran presenter, is not have you confirmed your performance date, but what exactly are you going to do next? The number-one question a musician should be asking his- or herself is: “What exactly is my own self-worth or value as one relates to one’s performance contract in any particular market?” The number one question I then ask myself, as a presenter, is: “Will the artist pay for themselves relative to our overall operational costs?”

There are two basic business models in the jazz music universe: non-profit and for-profit. Knowing which one is which will help you to navigate your own performance profitability. Each of these two business models share the same operational expenses regardless of where or how they exist in that jazz music universe: room rental, taxes, insurance, utilities, maintenance, and salaries. These are all proprietary expenses that only the venue presenter and their talent buyer know, for which every artist must be aware, and location really does matter. Every venue contains its own audience capacity and will vary upon whether one is negotiating a club, a concert, or a festival date. If you are a repeat performer (and lucky you!) then both presenter and performer have access to prior analytical information.

The first step in attaining financial profitability for both is negotiating an equitable term sheet prior to proceeding to contract (the model outlines the basic economic outline and the latter determines whether you will be getting red jelly beans in your dressing room or not). The term sheet will reflect the price of admission, whether the artists and musicians will receive complementary or discounted food or beverage, the cost of any technical riders, whether selling product is permitted, and whether the artists’ guests will be allowed. The smaller the venue, the more sensitive the price points.

The contract is a negotiable and irrefutable legal instrument intended to enforce the terms and conditions between two consenting parties in a particular transaction. This mutually binding instrument is specifically designed to maximize mutual profitability and cannot be unilaterally dissolved without the express written consent by both contracting parties. Although, one contract size does not fit all.

If you are scheduled to perform in a night club, or at a concert hall, or at a festival or in a review with others, prices will be determined and can fluctuate according to your value to that particular presenter or promoter. In a club venue, the presenter is specifically identifying audience counts, food and beverage consumption, sales per person, and the ratio of your income to their operational expenses. As a seasoned promoter I rely upon past performance histories, the individual artists’ outreach via social media feeds with their follower counts, and Pollstar reports to establish market valuation. As a festival producer I perform all of the above due diligence and weigh that individual artist data against the income derived from any outside underwriting. Festivals often allow the promoter-producer to experiment with emerging talent alongside established musicians but will not necessarily render their own financial rewards in the long run.

Every musical marketplace is different, from New York to San Francisco to Milan to Tokyo, and every audience is drawn to each venue via a variety of successful strategies. The music industry is essentially an entertainment machine and timing that machine is the key to one’s own financial success. In my previous articles I discussed designing your own business plan and one’s own unique vision statement that will pave a path to long-term profitability. The old adage, “How do you get to Carnegie Hall?” and its answer “Practice, practice, practice” is especially applicable to today’s artist seeking fame and fortune on the stage today as it was a century ago. Unfortunately, there is no magic key to unlocking the jazz musical universe except through your own hard work and perseverance. Furthermore, there is no one music industry panacea. If there was, you would not need my advice.

Finally, there is no business in this business. Every musician or artist is their own individual brand and their brand is their reputation. I strongly recommend that artists subscribe to individual venue website calendar updates, observe individual artist pricing, whether aging or emerging artists are featuring guest soloists, identifying recurring artist dates, and understanding each venue’s own particular business model to ensure your own best negotiating practices. This approach will educate you to the symbiotic relationship between contracting parties, whether the artist can appease their audience and ensure presenter profitability, to help insure your own musical destiny. If a venue cannot earn enough revenue from providing quality entertainment at a reasonable price point then they cannot afford to keep their doors open and their lights on. If owning and operating a successful jazz club venue were so easy, I like to say, then there would be a jazz club on every corner in America and I would not need to compose informational articles or conduct educational lectures on this very same subject. Good luck and good gigs.

Harry Schnipper is the owner/operator of Blues Alley Jazz in Washington, D.C. Blues Alley Jazz is America’s oldest continuously operating jazz supper club. In addition to acting as owner, Schnipper is the executive director of its non-profit nightclub namesake. He is personally responsible for the oversight of series, concerts, festivals, and nightly performances. Blues Alley Jazz produces, promotes, or presents performances at least once a day, every day of the year.

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