Sofar Sounds Raises Huge Amount Of Money, But Artists Don’t See Much Of It
Sofar Sounds, a service which specializes in setting up artists with shows, particular house concerts, has had a pretty successful financial track record, putting on over 600 shows a month and bringing in an impressive amount of revenue – unfortunately, not much of that money seems to be ending up in the pockets of the actual musicians.
Guest post by Bobby Owsinski of Music 3.0
What if you played a gig and lot of people showed up, paid good money to get in, yet you received nothing? How about if you received what amounted to minimum wage? Yeah, that’s happened to us all, and it’s okay when you’re starting out and just getting your performing chops together, but when you’ve progressed beyond that you expect more. Then along comes a service that promises to help you find gigs, and you discover that it’s keeping most of the dough that’s been earned, especially after it gets a big investment. That pretty well sums up Sofar Sounds, which specializes in house concerts, and just raised a cool $25 million.
Sofar has been pretty successful to date. It does 600 shows per month across 430 cities around the world with around 25,000 artists. 40 of them have even gone on to be nominated for or win Grammys. Nearly a million people have attended the 20,000 gigs it has promoted.
But the economics don’t seem to add up, according to a great article in Techcrunch. Sofar pays an artist $100 for a 25 minute set. The hosts get nothing, but Sofar keeps anywhere from $1,100 to $1,600 or more per gig. Sound familiar?
According to the company, the reason why the artists get such a meager fee is that – wait for it – they’re getting exposure. There it is again, that age-old catch-all that every promoter, club owner, and most recently tech company has provided as an excuse not to pay musicians. While undoubtedly the “exposure” has helped in some instances, I bet it’s few and far between. I can never remember an artist or band telling me that their career’s turned on a “exposure” gig. Can’t remember reading about one either.
The company has now raised a $25 million round led by Battery Ventures and Union Square Ventures. It had previous raised $6 million from Octopus Ventures and Virgin Group.
Now that the company has money to play with, it sure would be nice if some of the proceeds from the house concerts flowed into the artist’s pockets. They’re the ones that have earned it and made the investment happen in the first place.