Thursday, 22 August 2013

How much are you worth?

Over the years, I have been in a lot of discussions about how much live music is worth.
The only thing I can categorically state after all these discussions is that:
  • Most bands and artists believe they are worth far more than they really are but in actual fact often charge far less than what they are actually worth.
  • Most venue owners, promoters and booking agents think bands charge far too much but often pay far more than a band is worth.
Is that slightly confusing...

So how do we resolve this.
There are two ways of doing this, a measure based on a good relative comparison, or a measure based on value. I'll look at each, but this week we focus on finding a good relative comparison.

I'd like to introduce you to what I call the "Plumber Test".
In my opinion a good musician requires about the same level of skill as a Plumber to do their job.
Trainee Plumbers spend around 144 hours per year on theory.
They learn their trade over a 4 to 5 year period.
At the end of their training they need to spend about $20k to $30k on tools to do their job plus they may also need to buy a vehicle.

In contrast, a musicians easily spend 5+ hours per week rehearsing (260 hours per year).
It takes at least 4 to 5 years of 10 to 20 hours per week practice to master an instrument.
In order to play in a band, you could easily spend $20k to $50k on your instrument, sound equipment and vehicle.

I think this makes it a fairly valid comparison.

The current hourly charge out rate for plumbers is $85 to $95 an hour. Note this is not the what plumbers get paid, this is how much they charge, in reality they are probably only paid 25% to 50% of this amount. The rest covers tax, ACC, vehicle costs and also a profit for their employer. If they are self employed, they keep this profit.

As most musicians are self employed, a charge-out rate of $85 per hour would equate to around $255 per musician for a 3 hour performance. But what about the driving time to get there and the time to setup, pack down and drive home again. Plumbers usually charge for this time, but they may do so at a lower rate. Lets roll with $40 an hour for non performance time. Say you have a 3 hour gig at a local pub starting at 9pm.

You start loading up at 3pm, drive to the venue, load in and setup. A good performer should be able to setup and sound check within an hour so lets allow 1 and a half hours for transport and load in. If you choose to hang around before the gig, that's on your dime. After the gig, there is around another hour of pack out and travel. That gives us 2 and a half hours of travel / setup at $40 an hour and 3 hours of performance at $85 an hour. That's $355 per musician. So a 4 piece band using the Plumber Test comes in at around $1420 + GST for a 3 hour show.

Now, if one person owns the van or one person owns the PA system, you might decide to compensate accordingly, but  this seems about right for a nights work to me.

Referring back to the Plumber Test.. How much would you pay to call out 4 plumbers to your house on a Saturday night when they live an hour away and then spend 3 hours fixing your flooding sewer pipe.
If you got a bill of $1400 for that scenario, I don't think you would feel too ripped off.

So the Plumber test works in most situations, however where it falls down is when one band is considerably better than another (just like some Plumbers are a bit dodgy). Or perhaps one band can pull a massive crowd and another band can't. This is where the concept of value kicks in and our Plumber Test goes down the toilet quicker than a leaky sewer pipe. Next week we will look at value and determine exactly what you are worth.