BUSINESS OF MUSIC
LECTURE – WEEK 8
Last Week
• We looked at the Law of Agency and in particular the roles of agents
and managers.
• We considered the duties of an agent under the law of agency.
• We discussed different business structures for managers
• We considered a number of analogies to help understand the nature
of the artist-manager relationship.
This Week
• We will consider the live music industry.
• We will consider the roles of various players in the industry and how
their businesses operate.
• We will consider the economic basis of live music events and
participants.
Overview of Live Music Industry
• We looked at the concept and origins of the live music industry in
Week 1
• We did that off the back of establishing our key position regarding
music generally – that the business of music is about connecting
creators and consumers of music.
• That led us to the following statements:
ORIGINS OF THE LIVE MUSIC INDUSTRY
• We recognise that artists, managers, agents, concert & festival
promoters, venue operators etc. in the live performance
industry are always grappling with the same issue:
How to attract an audience in a
sustainable way that enhances the
experience of both the creators of the
musical performance and those that
are witnessing or consuming it.
BOOKING A SHOW
• Once a performer has created or even conceived a show a time,
place and certain conditions need to be established for the show to
proceed.
• A performer can approach a venue (which could be any type of place)
and seek permission to stage their show there. The venue could be a
club or pub, but equally it could be a non-traditional venue.
• Or…the venue could approach a performer and make them an offer to
perform at that venue - presumably because the venue has a reason
to have music performed live.
BOOKING A SHOW
• At this point intermediaries can become involved. Perhaps the artist
wants someone else to make representations on their behalf to attempt
to generate interest in their live performances.
• That is the role of an agent (as we discussed last week).
• Or perhaps the venue also appoints someone to seek out live
performances on their behalf – that is the role of a venue booker.
• Then agent and the venue booker will interact directly as representatives
of the artists and the venue respectively.
BOOKING A SHOW
• In some situations a third party will see an opportunity of having an
artist perform at the venue and be willing to take the financial risk of
such an event, in the hope of making a profit on staging that event.
• That person (or company) is a promoter. They will engage to artist
to perform, engage the venue to host the show, pay the costs of
staging and marketing the show and sell the tickets.
• Having a promoter involved shifts the financial risk of the
performance (partially) away from both the artist and the venue.
• A lot of the business arrangements and negotiations around the
presentation of live music tend to be about the parties each trying to
minimize their risk while maximising their return
MARKETING AND PROMOTING THE
SHOW
• No matter how the show has been booked the next step is attracting
an audience to that show.
• This could be a simple as a blackboard out the front of a café saying
“Live Music” to a multi-media global advertising campaign for a
superstar artist world tour.
• In these circumstances decisions have to be made about the cost
and methods of marketing in context of the likely returns that the
show will generate for all participants – and who should incur those
costs, when and in what proportions.
• Again – risk and return are the main pillars of those discussions.
MARKETING AND PROMOTING THE
SHOW
• If there is a charge to the public to see the show then ticketing
arrangements need to be made.
• Increasingly ticketing is an important part of the eco-system – as the
ticketing sale is the transaction that drives the live performance industry.
• Ticketing is also now a major part and platform of the marketing of a show.
• The database that is grown by ticketing companies is also incredibly
important and the way that database is utlilized is a hotly discussed issue.
• Another recent development is the advent of “dynamic pricing” where the
ticket agency shifts the ticket price according to currently demand – much
like airlines or Uber does.
• This is a controversial practice but it really is just another risk avoidance
tactic.
STAGING THE SHOW
• Once all the necessary arrangements have been made and an audience
has been attracted to come to the show the burden shifts back to the
artist to stage the promised performance.
• At that point additional services will be needed – sound, lighting, staging,
facilities etc. For an acoustic performance in a café these might be
minimal for a massive festival these logistical and technical requirements
are huge and require the co-ordination of the services of hundreds of
people and dozens of service provider companies.
• And then there is this….

SUMMARY
• Every one of those businesses and people engaged in the process
of creating, booking, marketing and staging a live performance
can rightfully claim to be a part of the live music industry.
• Some of them may provide their services to other industries but most
of them are specialists in that area and derive their income from the
live entertainment business.
• The Live Music eco-system is incredibly big and it is notable for
consisting of both global monolithic corporations and numerous sole
trader service providers.
THE BUSINESS OF THE PROMOTER
• As we have discovered at larger venues the venue itself is
rarely the risk-taker with respect to the show it is hosting.
• That role is normally played by the promoter – a
person/business that speculates on the success of a show and
retains the profits or suffers the loss depending on how their
speculation plays out.
• The business of promotion is not confined to concerts though –
promoters are also responsible for the festivals and events that
dot our entertainment landscape.
• This has come into focus lately where a number of festivals
have been cancelled by their promoters citing insufficient
ticket sales and spiraling costs.
THE BUSINESS OF THE PROMOTER
• Australia has a very large number of promoters – operating at
different levels, in different genres and with different frequency.
• It’s a high risk business and it attracts a particular type of
personality.
• Some of the best known names in the Australian music business are
promoters – the late Michael Gudinski, Michael Chugg, Michael
Coppel, Peter Noble, Jess Ducrou etc.
• In recent years they have been joined by new players such as
Destroy All Lines and the Untitled Group - but in reality there
hundreds of people speculating on ticket sales to live
performances around the country.
THE BUSINESS OF THE PROMOTER
“To be in this industry you have to gamble
to a degree, but your gambling can be
informed and educated gambling or it
can be damn foolhardy gambling.
I’ve seen examples of both. You just need
to know that the ones that fuck up have
to be a lot smaller than the ones that
succeed. That’s the key.”
Dror Erez – Stereosonic
THE BUSINESS OF THE PROMOTER
“Maybe it’s the mathematician in me, but I
like the instant result of planning a show and
watching how people purchase tickets and
seeing what the result ends up being. I just
have a very strange fascination with that
process. I love the very real, solid response to
that process. There’s nothing vague about it.
You put a show on, you set a ticket price and
do the best you can to present it and people
are going to come or not, and the result
determines that artist’s career.”
Jess Ducrou – Splendour In the Grass
THE BUSINESS OF THE PROMOTER
• At one level it is a very simple business that involves a few steps:
• Identify a live performance that you believe an audience may want
to see
• Consider where people might want to see that performance
(aesthetically, geographically)
• Estimate what price people would be willing to pay to see that
performance at that location
• Establish what it will cost to stage the performance (including the fee
paid to the performer)
• Advertise and Market the existence of the performance in the hope of
attracting people to buy tickets
• Hope that all your calculations, estimates and predictions regarding
the demand, price, audience and costs were right!
• Consider this in the context of the festival cancelations we talked about
earlier.
THE BUSINESS OF THE PROMOTER
“Festivals are events. They are a specific
event and that’s totally different from a tour
where you are promoting in each city, or at
least the cities you choose to tour. A
festival will be in one venue and it's a one
to three to five-day event that needs a lot
of different people involved – site
managers and those sorts of people. You
might be running campsites and three or
four stages. It’s really a very different set
of issues.”
Michael Chugg
THE ROLE OF THE PROMOTER
• Contrary to common belief a promoter doesn’t require a large full-time
staff.
• Most of the services (production, publicity, staging, tour management
etc.)are contracted on a show-by-show basis.
• The promoters role is normally budgeting, contracting and coordinating
most of those services – in other words a lot of emails and spreadsheets!
• It’s not uncommon for a promoter to not even be at most of the shows on
a tour.
THE ROLE OF THE PROMOTER
“To be a promoter you need to wake up
every day expecting to have a lot of
problems thrown at you. You start every
day knowing that you will be putting your
flak jacket on and get out and deal with
every problem as it comes up, in order to
try and get to your strategic objective.
You need to have the ability to roll with
the punches and to think on your feet
and be able to divorce emotion from
rationality, so you can avoid getting
angry and sort the thing out.”
Michael Coppel – ex Live Nation
PROVISION OF PROMOTER SERVICES
• It’s now not uncommon for Australian promoters to use their own
expertise on a contract basis themselves.
• An overseas performer or show may simply require some local
knowledge and expertise and they will contract a local promoter to
provide that on a fee for services basis.
• It’s obviously a very different dynamic for a promoter when there is
no risk but also no upside for a successful tour or event.
PROMOTER PHILOSOPHY
“Ultimately I think the promoter’s
responsibility is to maintain, improve,
enhance or create an artist career in the
market in which they work. My name on a
poster does not sell one single ticket; that’s
why it’s in the small print. It’s the artist’s
name in large print that sells the tickets.
That artist gives you their career and says
you can use their image, notoriety, music,
etc, for a limited period of time in return for
a substantial financial arrangement. Then
you have a responsibility to enhance the
value of what they give you.”
Michael Coppel – Live Nation
THE BUSINESS OF A PROMOTER
• The key to the business of the promoter is twofold – it involves both
rational business thinking and relationships.
• Promoters must be able to maintain good relationships with artists,
managers and agents as these are the sources of shows for them to
promote.
• But on the other hand a promoter must be able to maintain their rationality
and not be swayed by:
• a desire to maintain a relationship at any cost
• a desire to cover business overhead by engaging in activity
• a desire to stage a great show
• a desire to beat a competitor to a show