RTP-area local music and culture

[local506 AT earthlink.net (Local 506)]

Okay, I've been biting my lip on this thread but I can't hold back any
longer.   There's just too many assumptions being made about the club
side of the business.   I want to clear this up for Local 506 and
other venues.  So here goes:

>>> venues should make their money off bar sales and the bands
shouldn't lose that cut at the door.

I can't really think of any major cost that an average bar has that I
don't have as a club owner, since technically I'm just a bar that uses
live music to (hopefully) attract customers.  However, as a club
owner, here are some of the costs I have that most bars don't:

- Advertising (Independent/Posterguys, etc)
- Higher utilities (running a PA is more expensive than a jukebox!)
- Higher phone bill
- Soundman salary
- PA repairs (in addition to owning a PA!)
- Not to mention, ASCAP fees (over a $1000 bucks a year)


Even without ASCAP fees, that's well over $3000 dollars a month this
club pays out that the average bar shouldn't have to.  Not to mention:

a) The average bar doesn't have to be booked with bands.  We spend
countless hours during the day each  week just lining up shows so that
we can have a reason to open.
b) You don't have to pay a cover charge to spend money at the average
bar.  For me, there is a additional charge to the consumer just to
have the priviledge of spending his/her money at my bar.
c) Most bars can open earlier in the evening than I can.  I have to
wait for soundcheck to finish.  Even still, most people don't roll in
until after 10pm.  So, basically, my bar only makes money about 3
hours a night.
d) As a club owner, you often have to offer guarantees to attract
touring acts.  I'm getting better at this, but I'd say I end up paying
out of my pocket on over half the touring bands that come through.
e) Lastly, how many non-music bars give away dozens of bottles of free
beer each night.  Well, we do...to our bands!   I just did the math -
that costs me over $6 grand a year.

The point is, if you expect a music venue to survive solely off bar
sales - then what is the incentive to having live music.  It would be
much easier to survive without those additional costs that live music
incurs and just be a bar.


>>>Anyhoo-- I'm of the mind that bands put a lot of time, energy,
creativity, and money into what they do and certainly deserve
compensation for their efforts.

I couldn't agree more.   At the same time, my landlord, Duke Power,
Owasa and many others expect their payment regardless of my creative
intentions.  If people don't come to see the bands, well, I still have
to pay those bills.  So, ultimately it's the consumer, not the bar,
that has a say in how much money bands make each night.

>>>the going rate for sound dude around these parts is $25 per night.
has been forever.

Can you introduce me to this person?   I'm not going to give out
salary figures of my employees, but I can tell you that this number is
not even close to what they make at 506 (although $200 is way off the
mark on the high-end.)  My monthly salary for sound exceeds my rent! 
And if you think they're not worth it - think about this.  Soundmen
get to the club before any bands and leave after all bands.  That
equates to a pretty long night (6-8 hours)...and really not a ton of
money for someone with a specialized skill.


>>>Yet restaurants and clubs and coffeehouses lose money and go out of
business all the time, which just means I don't know shit about the
restaurant and club and coffeehouse business."
>>>Neither do the owners, which is why they lose money.

Funny, when I did my financial analysis for 506 - I actually separated
it into two businesses: a) Bar and b) Door.  The goal for the door
portion wasn't even to make money, but to minimize the loss.   From
the get-go, I never intended to make money off the door.

With that said, I initially kept the incumbent 506 model of 80/20
split of door proceeds to see how that went over.  Well, I learned
pretty quickly that couldn't work.  At the $5 a head we were charging
for local shows, we would need 100 people for me just to reach
break-even - and I can count on one hand how many local acts have
drawn 100 people during my six months of ownership.

More recently I changed the business model at 506 from that 80/20
split of the door to first $100 to the club and 90/10 split of
everything else.  The goal here is to cover the cost of just opening
the doors as my employees have to get paid whether 2 or 200 people
show up.

In honesty, we make back that $100 less than half the time.  Again,
that means that I lose money on the door half the time I open them.  
And on my best nights - I break even at the door!  All the door money
I take goes to cover costs incurred by the the show - $100 dollar in
fixed cost for production, 10% in variable cost for taxes, door, etc. 
None of that money ever goes back into the club's pocket.

I never take any money unless it exists from the door proceeds and I
never take more money than the bands make collectively.  So that
policy really only kicks in after the first $200.   And if the door is
doing less than $100, well, that also means the bar didn't have a good
night either.  So, basically, there are many nights each month that it
would be better for me to stay closed than to open.


I really thought the closing of Go! would be a wake up call to the
local music community.  It isn't easy for music clubs.  Go! had great
people working there AND the support of the Cat's Cradle behind
it...and still couldn't survive.  If you have any suggestions for 506,
I'm always open to hear them.

glenn / local 506