One On One with Shane Glass – Business Manager and Tour Accountant
In this month’s column, we’ll be talking about touring. Why is it that so few of the top-selling arena acts are under age thirty? How do bands make money on the road besides ticket sales and merchandise? And how do labels strategize tours for their newly signed bands? Shane Glass, currently on the road in Europe as Stevie Wonder’s tour accountant, will tell us about the bigger trends in touring and how artists make money in this area today. And if you’re an unsigned band trying to plan your first tour, Shane has some expert advice for you too.
Shane, you’re a business manager at Provident Financial Management, a CPA (Certified Public Accountant), and you also teach a class in touring and tour accounting at UCLA in Los Angeles. Who are some of the artists you represent?
- Some of the clients that I currently handle are Pink, Motley Crue, Julie Andrews, and Shwayze. Currently, I am out on the road as the tour accountant to Stevie Wonder. I have also worked as the production accountant for the Paul McCartney US Tour in 2005.
Here’s a two-folded question: what does touring mean to you from a business perspective, and how has it changed over the years you've been in the business?
- Live music is a way for the band to connect to an audience in person without a second take. When you hear an artist live, you get to see and feel the vibe, and feel as though you are part of the experience.
From a business point of view, touring is the largest revenue stream for many touring artists. These earnings generate substantial sums of money for the top touring artists. The upper echelon of artists sell out amphitheatres and arenas, which can be up to 20,000 seats per night. In the past, there were a handful of artists that were able to sell out stadiums.
The artists generally don't have to share their touring earnings with a record label. But this is changing with the creation of the 360 deals. Record labels are trying to get a piece of the touring money these days.
For heritage acts, it appears that some bands are playing solely to fund their lifestyles. For emerging artists, it is merely a means of gaining exposure and building their fan base.
Are bands today touring to support their releases, or has the situation become reversed as many claim, where album releases are supplementing the tours?
- From my perspective, I think emerging artists are touring around album releases. However, many industry folks will say the reverse. It really depends on the genre. The album may be a form of motivation to get the artist on the road.
What trends do you see in touring today?
- I see touring becoming more businesslike in the sense that dealings are handled more professionally. I also see the near future as packaged deals of artists playing a venue. In a way, history is repeating itself: big name artists used to tour with each other all the time. Also, festivals seem to become a more and more popular way of gaining exposure.
Out of the largest-grossing touring acts today, a minimal percentage of these artists are under age 30. Why is that, you think?
- I don't think the record companies are trying to cultivate future icons. They are no longer developing the talent for the long haul. As mentioned, most major acts are older then 30 because these acts have generated a loyal fan base. Their music has lasted over time.
I think a big part of the problem is the dissemination of music today. There are infinite numbers of outlets to hear and get music. Distribution is becoming less and less centralized. With the fan base fragmented, it appears difficult to get enough people to focus on any one particular band.
It's said that fewer record labels are giving their new artists tour support. If that's the case, how do artists get funding to tour today and what types of tours will they do?
- Yes, this is the case. However, if you are an established act or a hot new young act that the label believes in, you may be able to get tour support. Some bands will need tour support since it funds their promo tour. Some need it to build the fan base. It is difficult to come by, but when you do, remember, it's recoupable!
How do baby bands get on the right tours?
- I hate to say it, but connections. Networking and just being willing to work hard and being reliable. Managers, attorneys, and agents are all possible allies in this game.
How do labels pick tours for their newly signed baby bands? It seems that some labels prefer to let them open for a major act at almost any cost - even if the two bands’ styles of music and fan bases might differ. The idea is to expose the band to as many heads as possible. Then there are other labels who’d rather send the band on a smaller club tour as a headliner, drawing fewer, but more genuine fans. Do labels share any preference in strategy?
- It depends on the point of an artist’s career. If the album is charting number one and is staying up there for a while, the artist will put a few shows on sale to gauge the market. For a new band, exposure to someone else's established fan base may work wonders. Plus, the routing and everything is already set.
What revenue streams exist for live performances today? Are there any new trends emerging?
- With regards to artists, they collect primary ticket sales (like Ticketmaster and other box offices), possible secondary ticketing sales (Stubhub), merchandising, sponsorship income, fan club membership, and publishing.
I am unaware of new trends, except that promoters and ticket sellers are taking names and email addresses. This way, they can sell your info to someone who cares, or who target ads for shows to you based on your likes.
Unique ticket pricing is another interesting trend, though. For example, there are ticket auctions that the artist may benefit from. Also, VIP ticketing packages sell well for certain artists.
What are good ways of increasing profitability on the road for baby bands?
- Do as much as possible yourself. Do not put friends on payroll. Hire a van and sleep in it if necessary, or get a cheap motel room a few times a week and have everyone stay in the same room. Don't have elaborate schemes on stage that distract your audience. Keep track of cash. Get on a festival circuit and leverage the free catering.
Also, sell do-it-yourself merchandising to help augment your tour costs.
The neatest trick to maximizing profitability on tour is to increase the number of shows per week. Quite often, a tour's costs are fixed on a weekly basis. Therefore, the more income you generate within that one week, the better.
What role does radio have in promoting touring bands today? Have any other entities replaced the promotional roles of radio and print media?
- I think radio is still useful as it is relatively centralized amongst music listeners. However, the social networking sites have been taking over. Not only can they play their music by request, but with one email blast, the artist can market his/her new show.
Online advertising, banner advertising, and web merchandise such as wallpapers and screensavers are constant promotions.
From a financial perspective, when is a band ready to do their very first tour?
- They can tour as soon as they are motivated and able to dedicate a few months to the road. Oh yeah, they have to be able to afford to tour. I see four options to fund the tour: record label, friends, family, fools...
How should a baby band or unsigned band route their first tour? How far away from their home base should they venture? Also: is there any difference in routing for a band living in a metropolis where there's a lot of music industry, such as Los Angeles, New York or London?
- Practice in smaller type towns where the press can't do much damage, and hone the touring skills. Route the tour in a logical manner. Don't zig-zag across the country. Every day has fixed costs on tour, so maximize the number of shows per week.
How do you create a budget for an unsigned band’s first tour?
- I ask if they have funds to tour with or if there are any dates lined up. It is relatively easy to estimate travel costs and come up with a weekly costs figure. I then put pen to paper to see if they can sustain off the income they generate. If the tour is in the red, then something must change to get the tour off the road.
What are common budgeting pitfalls?
- Cheating yourself by budgeting too low. Don't be overly optimistic. Many people forget common tour expenses. They also don't understand the intricacies of payroll taxes or insurance. Quite often, an expense contingency is left of the budget. The artist always has a "brilliant" idea mid-tour.
With today's high gas prices, where can savings be made?
- Better routing… maybe a newer bus or van gets better gas mileage.
Define what settlements mean.
- The settlement is the official agreement between the promoter and the artist on how much the artist is being paid that night. Everything from catering expenses to ticket sales and ticket comps are discussed, evaluated and compared to the original deal.
If a band doesn't have an agent, how do they deal with settlements?
- On a big tour, a tour accountant handles the settlements. With smaller acts, the tour manager often handles the settlement.
What are some common hidden/inflated/created expenses? Common promoter tricks of the trade?
- Dressing rooms are generally inflated. Each show is different. I think the day of the "fake" invoice from a promoter has subsided in the US. Let's not forget that Live Nation is the largest promoter in the world, and it is a publicly traded company that has to answer to shareholders.
Promoters may be getting rebates from Ticketmaster based on the number of tickets sold at their shows. Promoters now own some of the venues and collect ancillary revenues such as concessions, beer, food, and merchandise.
When is the best time to put tickets on sale, advertise a show and create promotional buzz for a baby band? A month before the show? Two weeks?
- Probably about six weeks before the show to create the hype. Blitz-Krieg the advertising and then follow up with other advertising based on ticket sales. Funny enough, the more tickets that are sold, the less one needs to advertise.
Nikki O’Neill is a singer, songwriter and guitar player in Los Angeles. She fronts the Nikki O’Neill Band – a soul and rock band gigging frequently at clubs and festivals. She also plays guitar with a Led Zeppelin cover band for fun, and with local hip hop, soul and gospel artists. She has written songs with Sly & Robbie, and you’ll find her in Sue Foley’s upcoming book, “Guitar Woman.”