A Little Musical-Economical Thought Experiment

For my own curiosity and amusement, I've been pondering a question lately - can a band really make money as a relatively successful independent label band and I've come up with a very rough back of the envelope calculation. For the sake of simplicity I've taken cd sales out of the equation (ie, lets say the band breaks even with these sales covering their recording costs, legal, publishing and some promotions) and so the money would all come from touring.

So here's the scenario - you have a well-reviewed, well-followed band that can sell out mid to large clubs in most cities in America but probably won't be playing in arenas regularly (ie Grizzly Bear, The National, Vampire Weekend, although the latter two have already moved up to Constitution Hall as a local stop). This band would play 1000ish people venues and charge $25 a person. The tour would be 50 shows in 60 days.

The starting revenue is $25,000 a night, then. Ticketmaster gets their money from the tacked on ticket fees and none from the stated price. Add to the ticket money some merchandise sales - let's say the band sells 150 pieces of merch and gets an extra $1000 profit out of this. Also in consideration is the venue's alcohol sales. Let's say they sell an average of a drink every two people and clear $3 profit a drink so that's $1500 for the venue. Put it all together and you get $27,500 made at that venue that night.

And this is where I really start guessing, but with somewhat reasonable estimates. Now let's take out $6,500 as the venue's cut to cover staffing, rent, advertising. This then leaves the band and their crew. The band is a four-piece and the crew I would guess is six people - lighting, sound, two roadies, driver and tour manager. You could easily cut that down to four but it seems a good number. Of the $21,000 remaining, let's say you pay out $4,500 out to this crew and allocate $1,500 for random expenses - bus rental, gas, equipment repair . This leaves a nice sum of $15,000 per band member. Split it in four and that's a $3,750 a band member a night, times 50 nights and adds up to $187k for two months of touring.

So am I crazy? Are these numbers totally out of whack? I'm not really sure, but unless there are some totally unexpected costs, this seems to be possible to achieve. It gives me hope in a world where album sales are becoming a thing of the past that a band with a following can make a living.