"The Uber of Live Music"

Sofar Sounds house concerts raises $25M, but bands get just $100:

Tired of noisy music venues where you can hardly see the stage? Sofar Sounds puts on concerts in people's living rooms where fans pay $15 to $30 to sit silently on the floor and truly listen.

I mean... nooooo? That sounds dreadful. But go on...

Nearly 1 million guests have attended Sofar's more than 20,000 gigs. Having attended a half dozen of the shows, I can say they're blissful...unless you're a musician to pay a living. In some cases, Sofar pays just $100 per band for a 25 minute set, which can work out to just $8 per musician per hour or less. Hosts get nothing, and Sofar keeps the rest, which can range from $1100 to $1600 or more per gig -- many times what each performer takes home. The argument was that bands got exposure, and it was a tiny startup far from profitability.

Today, Sofar Sounds announced it's raised a $25 million round led by Battery Ventures and Union Square Ventures, building on the previous $6 million it'd scored from Octopus Ventures and Virgin Group. The goal is expansion -- to become the de facto way emerging artists play outside of traditional venues. [...]

The startup has enriched culture by offering an alternative to late night, dark and dirty club shows that don't appeal to hard-working professionals or older listeners.

How shall I put this...

You and me, we are never going to be friends.

By comparison, Sofar makes Uber look downright generous. A source who's worked with Sofar tells me the company keeps a lean team of full-time employees who focus on reserving venues, booking artists, and promotion. All the volunteers who actually put on the shows aren't paid, and neither are the venue hosts.

Ok, first of all... The author trying really hard to compute the "hourly rate" of the tambourine player* in an 8-person band playing in someone's living room is, let's say, off the mark.

If you're in a nobody band, and you get a slot as first of 3 on a bill, $100 is actually generous. That's the sort of guarantee an opener is only likely to get at a show that is already predicted to go pretty well.

There are several common ways that live show contracts work. Sometimes it's just a flat fee. But for small shows with up-and-coming acts, a typical structure would be: $X guarantee (the bands get that no matter what), then if the door takes in more than $X, the house gets the rest up to $Y (to cover costs: rent, insurance, sound tech, light tech, security, cashier, manager, and oh yeah promoting the show) and anything above $Y, the bands and the house split 80/20. For a really small show, $X is probably 0. For a big show, it might be $20k. Then the bands split their take probably 60/30/10. So for the opener to have a guarantee of $100, that means X=1000, which suggests a high degree of confidence of 100+ paid on a $10 ticket. Now it's not so small a show any more.

HOWEVER!

This company is doing the typical "gig economy" trick of externalizing all of their costs onto the contractors volunteers rubes. They have some small administration costs (shared across multiple cities and probably highly automated), but no room costs, no staff costs.

If I didn't have to pay the 5 to 30 people it takes to put on a show each night (not counting the artists!), and the room itself was free, those shows would be a lot more profitable. Oh yeah, and all of my friends would be unemployed.

Previously, previously, previously, previously, previously, previously, previously.

Tags: , , ,

16 Responses:

  1. Juha Autero says:

    I don't understand the math. If "fans pay $15 to $30" and Sofar gets "$1100 to $1600 per gig or more" that means at least 40 paying "fans". Who can fit that many people in their living room?

    • Elyas FANDI says:

      Well, we can guess that the "volunteering hosts" are typically well-off people with huge gardens and living rooms in the suburbs ?

    • Aidan Gauland says:

      Oh my god, I thought that was a metaphor for VR or teleconference concerts. Actual living room concerts??

  2. Nick Lamb says:

    I would assume it's also a classic gig-economy play in that doing this is illegal because it's dangerous, but they'll make sure the volunteer hosts are the ones committing the crime somehow. Figuring out how to ensure volunteers don't go to jail will be somewhere far down the "TODO" list after "make an actual profit".

    This same thing (random places that aren't licensed for public use and so don't have fire exits; aren't built to handle a panic; aren't even built to take floor loads from cramming hundreds of people into them - are pressed into service for an illegal event) happened when Rave culture exploded in the UK. Sooner or later people die. But this time a single gig economy company is planning they'll walk away with pockets stuffed with money, I am sure that will go great for them.

    The UK (the article makes clear but JWZ doesn't mention, this is originally a UK startup) requires venue licenses not only for selling booze (which I'm sure the average volunteer knows about, though examples I saw invariably mentioned bringing your own booze, which is another way this can all go terribly wrong), but for any form of public entertainment precisely because crowds mean trouble and a licensing regime allows them to at least make sure you were told about fire codes, the need for door staff, and so on. If you hold a riotous private party you don't need a license, and I'm sure some sort of wheeze is imagined in which these are "private" parties even though somebody the hosts have never met sold random strangers a ticket for $30.

    • jwz says:

      Yes, I see no way any of this could possibly go wrong.

    • NT says:

      I assume that not paying the host is to qualify it as a private party. The rest of their fee should be based on the cost of event insurance for the venue, which seems to be the main real service they offer.
      The traditional hell where you fund live music via alcohol sales has its own problems.
      Here in the Bay Area we had the Ghost Ship warehouse fire relatively recently. The relatives of the deceased sued the fire department for not preventing it, so the local fire departments have basically shut down the underground.

    • Zach says:

      Yep, here we go. They're looking for people to be "curators" who organize the events for $300 a show. They're clear that "We’re not a franchise," because that would be an actual regulated business structure that clearly delineates everyone's responsibilities. They helpfully address legal questions like "Do I need a business license?" by suggesting you figure that out for yourself.

      And presumably the "curator" is the one who winds up in jail should a venue catch fire or this otherwise go wrong in the hundreds of possible ways it could. It's all good though. They slapped together a quick Crisis Preparation & Response guide and require exit signs be posted.

      We could always check the terms and conditions for curators, complete with a very vague non-compete clause, a promise to indemnify Sofar for anything, and this unfinished sentence: "The mutual understanding of Sofar and you that the relationship being created is not an "

  3. DJ says:

    The very next item in my RSS feed Wednesday morning was this one: https://avc.com/2019/05/sofar/

  4. Anon says:

    You might be curious about Sofar's claims about per-gig revenue when looked at in the context of a 30 person crowd. You should look at three incredibly FUN, totally DISRUPTIVE things.

    The first is their actual list of venues. Canal boats and warehouses are -- WHO KNEW? -- popular unlicensed music venues. Sofar's own website says those things apparently accommodate 300 people.You don't find out what the venue is until the day before the show, of course, so you have to buy tickets to find out that it's a fire trap listed in the wrong town. The second is the number of "non-residential" listings, which generally translate to "you will be going to a shitty bar for one set during open mic night." The third is the artist agreement to have a Sofar video. You'll enjoy how much it makes it seem like the artist will get paid until you read the actual words. It's almost like reading a stoner band's standard recording contract.

    Illegal venues. False advertising. Predatory licensing. The standard practices of the music industry and shitheel promoters through the ages are FUN and DISRUPTIVE.

    Sofar's spin, as far as I can tell, is that they've stripped the Alt Weekly music listing of venue names and band names while reducing concert lengths to twenty minutes, but they've managed to get people to buy tickets at twenty bucks a pop anyway. If you don't care where you are or what band you're hearing, though, it's a great deal.

    • Zach says:

      That last bit is what threw me for a loop. I got a pitch to buy tickets to a Sofar show a little while back, and besides the many obvious problems and general shittiness of the entire model, the part that weirded me out simply as a customer is that they don't tell you anything about what bands you're buying a ticket to hear. The alt weekly music listings at least tell you what genre you're in for.

      Having established that these guys are the Uber of live music, their sales pitch of "you should just trust us that the bands at our basically daily concerts will all be great" was not really one I was receptive to, just as I wouldn't trust Uber with $25 in return for a random surprise.

      They also appear to have a signup form for people to "volunteer" to do such tasks as communications, videography, and audio engineering, which really seems incompatible with the labor code. (And who wants to go to a concert with a volunteer audio engineer?) As for unpaid "hosts," who the heck rents their living room for free to a company worth tens of millions of dollars?

      Oh, and they won't tell you how much the tickets cost until after you register for an account, which is a fantastic way to announce how much you suck to every prospective customer.

      • jwz says:

        Yeah, I totally missed that last part. You don't know who the band is and you don't know where they're playing??

        Who DOES that? I mean really, to whom does this appeal?

        Because as someone who does this for a living, I can tell you for sure, nobody wants to see the opener. The set of people who will watch a band they haven't heard of, even if they're planning to be there already, is almost nobody.

        • thielges says:

          Yeah you’ve got to have a lack of respect for your time to commit to hear unspecified “music”. Either that or be very open minded.

          As for whether anybody wanting to see a new opening act, I had one weird year when there main attraction to most of the shows I saw was the opening band. Then things went back to headliner normal.

        • Well, at least someone finally actually implemented the "music" version of that old "I like to go see comedy" joke.

  5. Lloyd says:

    Is there an opportunity here to monetize and launder bootleg recordings of concerts? Just set up a fake website with fake booking details and a phone dial tree going nowhere for your 'venue' where all the cool indie bands play.

    Time to dig through all the old DNA livestreams!

  6. Katja says:

    I put on house concerts in my Chicago living room pretty regularly and can get 40 people in there. (Though 35 is more comfortable.) You can get a lot of people in a room is you take out most of the furniture.

    I am blessed with a largish living room, but I've seen over 20 people at house shows even in small narrow apartments.

  7. tfb says:

    The weirdest thing about this (because 'startup trying to externalise costs, risks &c & getting away with it' is no longer weird) is the thing you point out at the start: gigs in people's houses, because traditional venues are, what, too frightening, with too many, you know, ethnic people? I mean, one of the things that sucks about being kind of old is that, somehow, I don't go to gigs enough any more. But, fuck, if I was living my life properly I'd be spending at least a couple of evenings every week in some dark room where there are too many people (or, sometimes, not enough people), the floor is kind of sticky and it's hard to get to the bar watching some band I've never heard of. Because that's what live music is: not some sanitised pastiche where people 'sit silently on the floor and listen': I really don't need more 70s prog rock gigs, but with sofas.

  • Previously