How Money Works at a Sofar Show: A Closer Look at our Expenses and Evolving Artist Compensation

How Money Works at a Sofar Show: A Closer Look at our Expenses and Evolving Artist Compensation
ArtistsDecember 19, 2019

Check out our update from February 2020 for more information on changes to artist payments.

We’ve been talking to many of our Sofar artist alumni in the past year, gathering feedback and input to help us prioritize the tools and resources we’re building to make sure we’re focused on the things most important to our artists. In February, we’ll be introducing a series of new features and improvements, one of which is a change to artist compensation at bigger shows. 

In the meantime, we want to share details about how money works at Sofar Sounds shows — it’s a common question we receive, so we want to answer that for everyone.

The average net income split between artists and Sofar is currently 63/37, with 63% of the net show income going to the artists. Our goal is to move from today’s 63/37 average profit split for our standard show format (3 artists and 20-25 minute sets) to 70/30 across Sofar-operated cities, in favor of the artist.

All the details are below, including a breakdown of typical show expenses and how we plan to evolve our artist compensation starting in February 2020.

Let’s get into the details:

How Sofar cities work

There are a few different types of Sofar cities — most of them (about 375) operate independently. The majority of these (~90%) put on shows that are free to attend, then pass-the-hat to collect money for show expenses and artists, with $0 going back to the business. The rest of the independent cities sell tickets online and pay artists a flat guarantee ($100 per act in the U.S.).

Beyond those cities that operate independently, there are ~30 that are Sofar-operated and host the majority of our shows — here, we also sell tickets in advance and pay artists a flat guarantee, but have small local teams of employees who book, organize and run all the events. Most big cities in the U.S. work like this, including Boston, so let’s use that as an example. 

The average net income split between artists and Sofar is currently 63/37, with 63% of the net show income going to the artists. The expenses above cover the local team and show costs. They don’t include centralized company costs, like the team that runs the website, ticketing and event booking systems, small marketing and finance teams, and others that make sure the shows happen and artists get paid.

Evolving artist compensation

Another question that has come up in our conversations with artists that we’ve been thinking about a lot: can Sofar pay more when we sell more tickets? Shows where we sell more tickets than average do help us offset the cost of shows where we sell less than average, but we’re figuring out how we can pay more for larger shows. Our goal is to move from today’s 63/37 average profit split for our standard show format (3 artists and 20-25 minute sets) to 70/30 across Sofar-operated cities, in favor of the artist.

Starting in February 2020, we’re doing two things:

  1. Increasing artist compensation for larger shows, while still guaranteeing each artist $100 for the smaller ones.
  2. Creating an artist advisory group to help make sure we’re focused on the right features and improvements. We’re discussing a few different approaches for the compensation increase at our standard shows with that group now and will share those details by February when we roll out the changes. 

Going forward, we’ll review artist compensation every six months, get feedback from artists and our artist advisory group, and share findings and any adjustments. 

We see this as a small step in a series of improvements to how Sofar works for artists. A few others that we’re working on:

  • Improved artist website, online application and booking 
  • Streamlined booking request system for touring artists
  • More ways to turn audience members into fans through merch sales and social follows
  • Making it easier for artists and photographers to connect, and for show photos and videos to reach more people 

Sofar exists because of our artists. Three-quarters of Sofar’s full-time employees are musicians — that’s why we’re all here. Sofar put on about 10,000 shows this year. That’s a great place to start. But it’s just the start.

If you have any thoughts or questions, reach out to artists@sofarsounds.com — we’d love to hear from you!

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