Creating a Merit-Based Music Economy: Compulsory or Blanket Licensing for Interactive Subscription Services
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B5. How Do You Get the Numbers to Add Up???
With all of these things happening, it sounds like the grass roots market is in pretty good shape, doesn't it! Well, that would be rather overstating the case. Often, none of the revenue streams are large enough to support an artist single-handedly. It isn't easy to make this all add up.
The key bottleneck here is the all-important gig, and small-venue gigs have substantial limitations.
Size/Volume/Style: Small venues have performance constraints that limit the kinds of acts that are appropriate to perform there. If your act is a bad fit for most small venues, all of a sudden the grass roots method is no longer viable for you, unless you adapt your act to fit more of the venues, or create a variety of acts to accommodate different venues. (You can't play the same few venues repeatedly in a short period, because even your most loyal fans only want to see you perform live once in a while, and so your attendance will drop precipitously.)
This isn't quite as bad as the pressure a major label will sometimes exert during production, in order to fit a popular controlled-rotation radio format, but it's the beginning of commercial constraints upon artistic expression, and any time that happens there is a distorting effect on the distribution of music in the marketplace.
Live Performance: What if your music can't be performed live at all? Perhaps you created your recordings with many overdubs, where your direct performance is critical to getting the right result for each part. Sorry, live replication is not an option. Or perhaps you are using some signal processing that is not feasible in real time. If the live gig is not an option, promoting and selling the CDs is not a significant option in the grass roots market -- at least not quite yet. So, artists who work exclusively in a recorded format without live performance are very disadvantaged in this system.
Profit Margins: Even for those who fit the small-venue market well enough, the gig-centered business model doesn't lead to large sums of money. Performing revenue is substantially offset by travel, food, and lodging. In fact, some small venues do provide in-house lodging as part of the package, especially some venues that are off the beaten path. Otherwise many acts they'd like to book simply wouldn't be able to afford to get there and back for the fee the venue can afford to pay. There's not a lot to go around.
CDs have to make back the recording and manufacturing costs before there is a net profit. The same thing holds for T-shirts (but a little quicker once they begin selling). So, at first the gigging is just about getting back to a break-even, not about making enough to live on. Over several years, acts may develop enough of a following in a variety of regions to start getting paid better for performing. But they have to work very hard to do it, and they still don't do much more than make ends meet.
Promotion Synergy: Not all venues are located where promotional media are available or effective. There may be no college or small public radio station to interview you for that gig, or local press to cover the venue and the artists performing there. Or, if those resources are there, they may not be attuned to your kind of music. Even if your audience is there, you may not be able to effectively reach them to promote your gig.
Tour Efficiency: Getting bookings that count isn't an automatic thing, and getting them to fit together into a sensible tour (so that gigs located together in space are also together to some extent in time) is even harder. The strategy is to get a "keystone" gig and then aim to fill in additional gigs around the area close to that date. But those additional gigs may not be available, and may pay rather less than the keystone gig (having lower travel expenses can offset that loss, which can make it worth the effort). The more you have to travel round-trip instead of round robin, the more travel and related expenses can cut into your profit margin.
Audience Geography: The appropriate audience for your music may be geographically spread out sparsely enough that, even with everything reaching potential, it's unlikely for many of them to get together in the same place at the same time. So even if you have a decent-sized potential audience when it's all totaled up, the live performance model may simply not be a profitable way to market to them, for you as well as the venues.
Artist Community: Many if not most artists who are making their way in the grass roots find other artists with whom they share musical sensibilities. They support each other with networking about venues and press, sharing tips about a variety of professional topics, cross-pollinating their audiences, and generally providing each other inspiration as peer-mentors. But some artists may not find their peers as easily, especially if they are too geographically spread out to have a big chance of stumbling into each other. Lone wolves have a much smaller chance of survival in the grass roots than those who have found a community.
Niche Markets: There may be a special niche among the grass roots that some artists can fit, such as churches. These can be very helpful because they come with their own audiences intact, without relying on the artist's brand image to bring the audience to a performance. This is a sort of intermediate step between featured performance and work for hire (such as weddings and parties). However, a lot of music has no such niche to take advantage of, and in general one can't count on fitting into one.
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