On a Tuesday night, a 2,000-seat venue is sold out by a mid-tier band. There is a wait at the merchandise booth, and the atmosphere and excitement are genuine. That was a successful night by all conventional standards. Furthermore, the band might have lost money on it anyhow.
This is the portion of the touring industry that isn’t featured in news reports about stadium tours that break records and sold-out arena runs. Live performances have subtly changed from being a source of income for heritage and mid-tier artists—those who established their careers during a time when touring consistently funded everything else—to a financial risk that frequently fails to pay off, even when every seat is sold out.
Since 2019, there have been significant changes to the touring industry’s cost structure, but these changes have not received much public notice. The cost of fuel for trucks and tour buses has increased. International crew visa processing has become more costly and bureaucratically complex, particularly for European touring following Brexit.
The customs paperwork needed to transport musical equipment across borders, known as ATA carnets, is now more expensive and requires more administrative work than it did in the past. In most markets, hotel rates for touring crews have increased more quickly than ticket prices. All of these expenses appear on the tour’s profit-and-loss account, but none of them appear on a performance poster.
The structural issue of who truly owns the venues comes next. Due to Live Nation and Ticketmaster‘s hegemony over large venues, artists are working within a system where administrative, facility, and service prices are determined by organizations with no motivation to keep them affordable. Additionally, a lot of corporate-owned venues have begun to take significant cuts on product sales, typically between 20% and 25% of gross revenue from the T-shirts and records that artists have traditionally relied on as one of the few profit areas that are truly under their own control. A “successful” night becomes significantly less successful when the venue takes a quarter of your merchandise table in addition to facility fees.
Alongside all of this, production expectations have increased, and audiences bear some of the blame without even realizing it. These days, a band performing at a 1,500-seat facility frequently needs to bring lighting rigs, video production, and crew sizes that would have been typical of much larger venues ten years ago. Even during a club performance, audiences anticipate something akin to the arena-level visual standards that they have received from social media and streaming. Regardless of how many tickets are actually sold, meeting that expectation will require hiring more staff and renting more equipment, which will result in greater fixed expenses.
The actual money was expected to flow through the streaming economy, but for many artists, it hasn’t materialized. Payouts per stream range from $0.003 to $0.004, which is a small amount of money that needs a lot of plays to be worthwhile. Touring used to be the obvious way to make up the difference if there were no substantial physical sales or sync licensing agreements to augment that money. These days, it’s frequently where the disparity widens.
Recognizing that individual artist actions won’t solve the structural issue, groups like the Music Venue Trust and the Featured Artists Coalition have intervened with lobbying efforts and emergency financial methods like the UKAT fund. In response, some musicians have shifted toward localized residencies, which involve performing repeatedly in a single location as opposed to a taxing national tour, or they have created exclusive online fan groups that bring in money directly without the overhead of a live performance. In contrast to the unpredictable economics of a headlining club tour, others are gravitating toward the festival circuit, where guarantees are typically more dependable.
