Creating a Merit-Based Music Economy: Compulsory or Blanket Licensing for Interactive Subscription Services
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B. Grass Roots Music and the Struggle For Artistic Integrity

There are many more artists trying to build music careers than the major labels could ever reasonably consider signing to a record deal. Some would argue that the majors already sign far too many acts for the mass market, and that this is an important reason for their high failure rate. What are the rest of these artists doing? They form one growing alternative to the major system: the grass roots market.

The musical grass roots have been around for a long time in various forms, usually arising from what people tend to call "folk music." People often pursue this as an avocation, or as amateurs (strictly speaking this means "for the love of it" -- it doesn't necessarily mean that these musicians aren't professionally skilled, they just don't make much money from it, if at all).

Grass roots musicians have been increasingly struggling to find ways to build music careers. In the last 15 years or so they have made some progress by imitating some of the things labels do, but on a local/regional scale instead of national/global. The advent of the mainstream Internet has provided some hope to expand these capabilities even more, but there is a limit to how much an individual act can do alone to contribute to collective changes. Here's how it basically works.

B1. Small Venues

In the star game, there are a limited number of large venues where acts can perform before large audiences and make a lot of money all at once. These include concert halls and auditoriums, arenas and even stadiums. This is a bottleneck, similar to the mass media and retail distribution bottlenecks. In order to get booked into such a venue, an act needs to have a proven "draw" to expect to be able to fill the venue, or at least sell a large enough number of tickets for the venue to break even on operating expenses.

If you aren't a star, you have little chance to perform at a large venue, unless you can wrangle a warm-up spot with a star that can draw most of the audience. The trends in the business are moving away from warm-up acts, with the occasional exception of a major-label "developing act" or a former hit act in leaner times. Unaffiliated acts generally do not have access to these venues, with a few exceptions that prove the rule along the way. And, it wouldn't make business sense: the venues would fail to cover their operating costs if they couldn't sell enough of the seats, and they generally can't sell those seats unless the act is well-enough known to draw the audience.

So grass roots artists tend to play at smaller venues: nightclubs/bars, cafes/coffeehouses, even private homes where hosts present a series of "house concerts" in their living rooms. Instead of playing to hundreds or thousands of people at a time, it tends to be in the dozens. There are a lot of these smaller venues, many more than larger ones, and so there are a lot more opportunities to perform at them.

But because they are so small, there isn't a lot of money to be made at any single gig (an appearance at one venue). A portion of the money that is made sometimes goes to the venue to cover their operating expenses, perhaps in the form of a drink or food minimum, or a share of the ticket price.

Depending on where they are located, small venue gigs may or may not be profitable for artists themselves. In large urban centers, the operating and real estate costs are higher, so less goes to the performing acts. Also there are many more acts in urban areas, many of which are happy just to get some stage time to practice performing as a group. So, that glut of artists drives prices down for acts in urban areas.

It is common for bandleaders with paid sidemen to lose money playing at small venues in urban areas, because what they take in does not cover what they pay out to the band and for promotion. Promotion is necessary because small urban venues tend to do only the barest minimum of promotion on their own, expecting the act to communicate with their fans and draw them to the venue directly.

Moving out of the urban areas to suburban and rural areas, there are many fewer local acts, and less operating expenses, so the net revenue tends to be positive, if still moderate. Also, regional venues cannot always expect an act from out of the area to market directly to a local fan base, so they tend to promote themselves more consistently and systematically as branded venues, developing a local following. If touring grass roots artists do well at a venue, returning from time to time, they may also develop a local fan base, and that can only help.

The acts that can do the best in this performing market are those with the least expenses: solos, duos, and on occasion a well-organized trio. Any more than that, and the small stage space at these venues begins to be a logistical issue as well. It's often the kind of performance format that the major business tends to call "unplugged" even if amplification is involved on a small scale. Rock bands do have outlets in the grass roots, but perhaps not as many as the acoustic-style folk acts, outside of the urban areas.

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