Major Record labels, deals, contracts and music marketing at A&R Online

The Real Truth Behind Pay To Play
By Chris Standring

Few things get my goat. "Pay To Play" has always been one of them, as long as I can remember. Until recently. For those of you who are not familiar with this concept I will briefly explain.

I should preface this article by saying that there are indeed many other band-booking scenarios. This article is specific to one and one only. Also, the concept of pay to play is rife in big US cities such as Los Angeles and New York. It may not exist in certain countries. It's not a perfect world, just the one that we live in. Ok, with that little disclaimer aside, I will continue....

An unknown (and unproven) band will approach a club booker and try to get their act booked on a certain date. The booker listens to the band's CD and decides that they are worthy of public attention and agrees to give the band a date. There are two ways this will pan out.

First, about 300 tickets will be printed up and sold to the band by the club. The band then sell these tickets to their fans and do their promotional job inticing people to come see their show. It is in the bands interest to sell all the tickets otherwise they are out of pocket and end up "paying to play".

The second way is where a contract is issued to the band explaining that they need to have a certain amount of people in the club for them to make a profit, lets say 100. If 100 people do not show up and pay 5 bucks to get in, the remaining amount is due to the club. So if a band only fill that club with 50 people, then 50 people (that haven't paid $5) is due to the club. The band end up paying the club $250.00

Ok so now we have that understood let's try to get a new perspective on this. Although I have always abhored this behaviour from club bookers I have a new attitude to it, something that changed once I started touring as a recording artist, promoting my own records.

What all bands want is a nice guarantee to perform at venues and start making a profit. However, as a new unproven artist, one has absolutely no market share. This is essentially "ticket value". If a promoter wants to book The Eagles to play live then he knows that this band has an enormous fanbase and can guarantee an audience. He then does a deal with the bands' agent who later accepts. The promoter is initially out of pocket but with low risk as he has done the numbers and knows that he will turn a profit with this proven act.

The new artist has no market price as this band is unknown. Therefore a club booker cannot offer a guarantee because he is at risk with this band. It is therefore the band's responsibility to take the risk. Usually the band does take a hit because it cannot draw a crowd and ends up out of pocket. Now the band has an attitude about giving away free entertainment! But this is business. A product needs to be proven to work before other business people decide to get involved and give away money.

Here is something that opened my eyes once I got in the record game. A manager friend of mine said to me as I signed my first record deal, "Welcome Chris, now you're off to the races let's see how much money you lose in the first year!" Now there's encouragment I thought. Wise words however and I took heed...

As my first radio single took off on the airwaves I started to get invitations to perform at radio station events and promotional functions. Most radio stations like to have annual events they call "listener parties" where they invite thousands of listeners to an event they put on and invite lets say 3 bands to perform. The first two artists will be proven stars, the third (little old me in this example) what they call a "new rising star". The first two bands may be offered a guarantee to perform, but quite possibly not. Usually if money is offered for radio events it will be minimal as they expect record label tour support. Sponsers sometimes jump on board and offer free hotel and air so ostensibly the radio station end up coming just a little out of pocket to promote their event.

So, I am invited to perform at one of these listener parties but the radio station only want to pay $1500.00 assuming that my label will kick in the rest. I go back to my label and ask for a further $2000.00. The event is on the east coast and I have to fly 4 other guys as their is no air sponsor. Air tickets are costing $595 each as it's peak summertime. That's $2975.00 before I have even paid my sidemen! My label agree to kick in $1500 and that's it! So now I have a guaranteed budget of $3000 and my air fares for the band have tapped that! I absolutely have to pay my band as they should not have to take a hit, it's my career after all! I decide to try and do the show without a sax player. That will save me an air fare and show fee. Now my air fare is down to $2380.00.
I'll pay my band $250.00 each to do this show. Now I am up to $3130.00

I am down $130.00 and I haven't paid myself a penny!!! Do I do the show? You're damn right I do, this listener party has 7000 people coming in checking me out, possibly buying my CD and becoming new fans.

Now 3 years later and another hit record to my name I am being offered more healthy guarantees from promoters in the USA and Europe. Why? because I was smart in the beginning and made sure I got things to work when I needed them to. Now I even have musicians I call to do shows that live in New York, Los Angeles and London to make an even healthier profit. This is obviously not such a good idea if you are a 4 piece band but as a solo artist you can do this very effectively. By hiring musicians in London for a UK show I can save myself around $2400.00 That's a big slice if you do this on a regular basis!

So understand one thing. You have to start small and build your fan base. Once you have a legitimate fan base, you can do good deals with promoters. In order to do this you need to localise. Build in one area and expand. It's a "baby step" program. Watch for the con artists, they do exist as I'm sure you know. Be smart. I love contracts, you should grow to love them too. Prove yourself. Build your market share and understand that "pay to play" does exist but it's nothing more than smart business. Once you have market worth, trust me promoters will be calling you offering healthy guarantees!