Music Biz Economics – How does the money flow when music bands tour? Do they “rent” out the theatre/stadium, or does the facility “hire” the band? Who takes the hit if tickets don’t sell?

Question

Music Biz Economics – How does the money flow when music bands tour? Do they “rent” out the theatre/stadium, or does the facility “hire” the band? Who takes the hit if tickets don’t sell?

In: 2

Answer 1

Assuming you’re talking about a well established and famous band on a tour. There are many intermediaries. Broadly speaking, the band gets a cut of ticket sales and, if they’re big enough, probably also a guaranteed payment on top of that. The tour producer (a separate company) will be responsible for the logistics, booking venues, arranging ticket sales etc. The producer gets the remainder of the profits.

For smaller bands, the model can vary more. If they’re tour is more of going to established music places (studios, clubs, etc), the payment can be different. It might be more of a fixed amount negotiated with each venue.