The academic answer is to charge whatever the market will bear. However, the real-world answer is slightly more complex than that. We'll discuss some of the factors you'll want to take into consideration when pitching your gigs to talent buyers, along with an overview of some of the costs involved in setting up a show.
From a business standpoint, it’d be helpful to know what other bands are getting paid for similar shows. Knowing this information ahead of time will help you determine whether or not a certain venue is worth pursuing. Additionally, knowing this information early in the booking process could save you from wasting your time on venues that won’t offer you fair compensation.
As long as you're honest with yourself about the state of your music, you won't get ripped off by booking agents who think they know better than you. If you’re a relatively new band, with new members, and you don’t practice together much, if at all, then you’re going to find it harder to ask a rate similar to a well-established band with a following and a well-developed sound. As you become more familiar to a particular talent buyer, bring a crowd out reliably, and improve your sound and stage presence, you can start to negotiate that rate upward when you return to play later shows.
It’s important to be honest about how much you spend on gigs. This is especially true for bands that use hired guns as their backup singers or musicians because it takes time to sort through everyone’s schedules, confirm they’re available, and to call backup players if needed. Using a tool like Green Room to track your income and expenses can help you understand your profitability.
How much does booking time cost? Well, let me tell you the amount I estimate per hour. My hourly rate is $30, which is equal to $60K per year. You can pick whatever works for you. Just make sure you know what you’re doing before you start trying to negotiate. If you’re not booking and managing your own gigs, figure out what your management is charging and use that number. Then, figure out how much time it takes for you to set the lineup for a gig, on average.
Have you ever rented music equipment? If not, then get in touch with local stores about renting the gear you need. Add this amount to your budget before booking any gigs. Do the venues provide you with the equipment needed for your performance? Excellent! You don’t need to factor this cost in.
Many of the musicians that I perform with are happy if they leave a three-hour gig with $100. A lot of them want more. Here‘s how I figure it; I pay out my musicians equally with an even share of the guarantee, minus twenty percent set aside for booking and management. Tipping gets divided equally. Not everyone uses this kind of system, but I've found that giving musicians fair compensation encourages them to take on more engagements, as well as to work harder at practicing at home. The better your band sounds, the more money you can expect to make from tips and you become attractive to high-end venues. My minimum musician pay goal is like this: I value their time at $25 per hour, and a three-hour show typically lasts five full hours including set up and tear down. 5 x $25 = $125. That's my target to reach when I'm trying to pitch to a bar owner.
Other Expense: Things like insurance, marketing costs, etc., should be included but they are not variable so they shouldn't be factored into the cost of playing an average gig. Instead, estimate the number of gigs you'll perform in a year and then divide this total by the average price of each item.
Add up your expenses, and you may be surprised! I use a spreadsheet to calculate my expenses, and it has really helped me determine whether or not a venue’s offer is reasonable, given the expenses incurred. You can use Green Room's Gig Pricing Tool to do the math for you.
Other factors: Do you want to enter a new geography? Then it might be worthwhile to take a gig below your estimated costs, with the difference being considered a "marketing expense". If you're well-established in a market, it would be wise to raise your prices over the course of a year or two to match or surpass your expenses on any given gig. You should also plan to increase your prices over the course as your reputation grows (you should always be striving to do this), and you'll want to consider how much potential clients will pay for your services. For instance, I've taken several under-priced openers for a regionally-famous musician at low fees, simply because I wanted to get his name out there and build credibility. However, I'm careful not to undercut myself too badly, as I know that I can charge more later if things go well. In addition, I've had several well-paying private events from people in the audience at these "underpaid" openers, so there's always that to think about as well!
Private event or bar/club event? For whatever reason, music industry professionals have determined over the last few decades (and probably before) that private events should compensate their musicians better than bar or club shows do. When someone approaches you about private events, keep this in mind — these higher rates can often make up for some of the “marketing costs” incurred for underpaid shows. For a private show, I typically figure my production cost, then double it, then people are generally happy with those rates. Private shows are also more likely to negotiate with you, rather than simply refusing if they find your price to be too high. However, be careful, and try to stay within the range of what others charge. You’re providing an experience for your client, not extracting every dollar out of them.
There are many different variables that go into determining gig prices, and we’ve only scratched the surface here, but it should be enough to get you started. Long story short: be honest with yourself about where you are in your music career, do your research, and think about your costs. With these three things in mind, you’ll be setup for success (and growth) in your music career.
Green Room's Gig Pricing Tool is a great way to make sure you are accounting for all your expenses and coming out profitable!
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