- For many independent music venues without corporate backing, adjusting to inflation presents a particularly difficult challenge.
- While major stadiums have seen fans returning to see big stars, some venues have not seen their business fully recover from the Covid-19 pandemic.
- Live venues are struggling to keep ticket prices and discounts affordable as raw material costs rise and cash-strapped consumers watch their budgets.
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It has never been easy for small or independent music venues to turn a profit. Now, with bloated operating costs, some owners are struggling to keep ticket prices affordable to the public and are taking chances with lesser-known artists.
In the past year, music fans have returned to major stadiums to see sold-out concerts by icons such as Beyoncé and Taylor Swift, even as consumers have cut spending on entertainment activities. But many smaller, independent venues have yet to see business return to pre-pandemic levels, according to Steven Parker, executive director of the National Association of Independent Venues.
“If you’re a bigger place, you’re probably doing pretty well post-pandemic,” he said. “But if you were a smaller place, you see business and you keep your head above water, but you also see that a lot of the things that larger organizations have at their disposal, which is economies of scale, is becoming increasingly difficult .”
NIVA was founded in 2020 as a vehicle to lobby for government relief as venues struggled to stay open due to Covid lockdowns. He was a driving force behind $16 billion in federal aid to the industry and is now focusing his efforts on other issues, such as raising prices in the resale market.
The final challenge facing NIVA’s network of independent sites, Parker said, is protecting margins at higher costs.
First Avenue Productions, which operates several venues around Minnesota’s Twin Cities, has seen operating costs increase nearly 30 percent since before the Covid-19 pandemic, with everything from beer to ice to insurance becoming more expensive, according to owner Dana Frank.
“We don’t have corporate safeguards, we have limited resources,” said Frank, NIVA’s founding member and former board president. “Most people are, you know, owners, operators, floor sweepers, bookers, sales people, light bulb changers, everything.”
Paul Rizzo, owner of the historic New York club The Bitter End, said that while food and “every other expense” has gone up, he’s seen consumers spend less overall.
Part of that is a broad pullback as Americans tighten their wallets, he said. But it also fits a trend cited by some bar owners of younger generations of music fans drinking less than their older counterparts.
Some owners have suggested that the legalization of marijuana in many markets could eat into bar sales — a significant portion of music venues’ revenue.
For Alicia Edmonson and Joe Lapan, co-owners of Songbyrd Music House, a 250-seat venue in Washington, D.C., it’s an ongoing challenge to price discounts in an environment where raw material costs are rising and consumers are spending less.
Lapan said many fans expect higher-priced drinks in larger venues and stadiums, but don’t have the same expectations in smaller venues.
“There’s this idea that you go to a small establishment and it’s supposed to be like your little local bar, but that’s not the economics of the establishment,” Edmonson said. “We provide this additional service that we have to find a way to pay for.”
It all adds up to what NIVA board president Andre Perry describes as “a very difficult balancing act” to run a successful small establishment.
Owners must figure out how to market different acts each night, decide whether to take risks with newer acts, and continually adapt to their community as the economic landscape inevitably changes, said Perry, who works with live music for 20 years and now serves as director of Hancher Auditorium, the performing arts theater at the University of Iowa.
Unlike some small businesses, site owners don’t sell the same thing every day, Perry said.
“You’re taking a cultural practice and pushing it into the market, and I think there’s some tension there. That doesn’t mean it’s bad or that it’s broken, we just have to really work hard to make it sustainable for everyone involved.”
Many small venue owners are in the business for the love of music and society, not necessarily to make a lot of money, said Kat Henry, executive director of the Live Music Society.
Henry’s organization caters to venues under 300 capacity, providing grants to launch new programs or to take risks with newer artists who don’t necessarily draw crowds.
“I hope that at the state level, at the private foundation level, there will be recognition that this is not necessarily a commercial model, that there is support that needs to be put in place to have something that is a huge part of American culture.” Henry said.
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