No Easy Money
A friend phones you to say that your favorite band of all time is playing at the Orange Peel in Asheville this Friday…wanna go? Hell yeah, you do. A few clicks later on the Internet, you’ve secured a ticket and then stopped by the box office to pick it up on the way home from work. Daily excitement builds in anticipation of your night on the town.
Friday finally arrives…its show time! In the cooling air after sunset, you find yourself waiting in a long line that winds up Biltmore Ave. Everyone’s excited, you and your friends chat expectantly with other fans in line. You’re too cool to drool, but you can barely contain yourself.
Finally, you’re inside. House lights are up, the stage is dark. You head to the bar and find that all of Asheville’s microbrews are available on tap. Yes, this is going to be a special night.
Amplifier pilot lights pierce the stage darkness, chrome from mic stands and drum kit stand out like lighthouse beacons. You notice dark figures moving up there…is it them? Could it be?… Your stomach has filled with butterflies; instruments are being slung over shoulders by the silhouettes on stage.
Bang! The first chords of your favorite song are struck, and the stage lights come alive. The crowd around you disappears as the house lights go dark. You see the faces of the band, how they move, what instruments they’re playing and how they play them. ‘This is too much,’ your brain shouts above the stimulation.
The sound is so big; it has filled your ears to overflowing. This song, which you’ve heard hundreds of times through ear buds, has taken over your entire body. Amazing! You’re grinning at your friends, they grin back. The thousand other fans transmit their collective excitement to the stage, which is amplified by the players and reflected back.
Welcome to your first live music experience! Welcome to the Orange Peel.
There is just no substitute for live music, you say to your coworkers the next day. They agree, it was a special night. The crowd was great, the lights and sound were spectacular, the band delivered a stellar performance…even three encores!
To you and your friends the background activity leading up to, during, and after the show is transparent. While you were driving home, approximately 60 Orange Peel employees were hard at work.
Bars and bathrooms were cleaned, floors swept, lighting equipment underwent repairs. The box office was shifting ticket rolls for the next event. Technicians were tearing down the stage setup.
All must be completed by morning because another band will arrive to unload tomorrow at noon, and later on, a crowd will anxiously await that first chord.
This is 2012; we can listen to tunes on iPods, iPads and cell phones. We can purchase individual songs in milliseconds over the Internet. All of this is convenient and commonplace. Everyone’s tastes are different, but where music lovers unanimously agree is this: regardless of the genre, all music is best when experienced live.
There are a myriad of places where fans and musicians can meet to enjoy music. They range from large to small and can be found in just about every city across the US.
Tour managers decide on what type of venues their band will play. The largest being arenas, stadiums and civic centers which allow many thousands of fans to see the performance, but they are solely reserved for acts whose fame will draw enough fans to fill the space.
Theaters are the next size down, allowing, on average, seating for 1500-3000 people. The smallest category venues are music clubs, the capacity of which varies from 20 to 1500 fans.
Asheville has many places to listen to live music, but if you want to see headlining national bands in an intimate setting, the Orange Peel is the only place to go. Their 1100-customer capacity is large enough to attract national acts yet still offer ticket holders a quality listening experience.
The Orange Peel is headquartered in a building on the corner of Biltmore Avenue and Hilliard Street which has had a varied past.
From 1950 to 1962 Skateland Rollerdome, a local kids roller skating rink, called the address home. Then the facility was renovated as an R&B music club, with a string of different owners. Each ended up using a color in the name: Jade, Emerald and finally Orange. Touted as The Original Orange Peel, the club was one of the hottest venues around in the early 1960s, attracting national acts, such as the Bar-Kay’s and the Commodores to Asheville.
The building lay dormant for long periods then did a brief stint as an auto parts warehouse, after which the local downtown redevelopment company, Public Interest Projects became interested.
This organization, started by local philanthropist, Julian Price, realized that the city needed a music concert venue. The club, Be Here Now, was closed, and no business had stepped up to fill the void; there was no longer a place for Ashevillians to enjoy concerts by famous acts other than the Civic Center.
The Orange Peel opened its doors ten years ago and has been rated one of the best concert venues in the nation. The ‘Peel has been written up in USA Today, Travel and Leisure Magazine, Southern Living Magazine, Turner South Cable Network, Rolling Stone Magazine, Self Magazine, Cosmopolitan, and most recently, in the May 2011 issue of GQ. The club is known for presenting up and coming new talent as well as showcasing legendary performers.
To musicians who see the stage for the few hours they stand upon it, and to the spectators who enjoy the show, running a music venue seems easy…a walk in the park…an opportunity to listen to music and make money at the same time!
“If you had a few million dollars at your disposal and you asked me about opening a large music club, I’d tell you to think long and hard about it,” says Pat Whalen, the top man at the Orange Peel. “I’d also ask you if you were willing to part with most of that money.”
How could this be? Doesn’t the club sell tickets, take a percentage then pass the rest on to the band? Hardly.
A club that books national acts must pay those performers a fee commensurate with their star status. Lesser-known acts can be enticed to Asheville for as little as $2000, while big-time stars demand in excess of $30,000 per show. That fee is guaranteed.
The club pays a sizeable non-refundable deposit two months up front to maintain a slot on the band’s touring calendar, with the balance due upon completion of the show. Regardless of the turnout, the weather or fickleness of the fans the band will be paid in full.
Let’s do a hypothetical month as a risk assessment exercise: During their high season, the Orange Peel averages 25 shows per month. For simplicity let’s assume that every act in our fictitious month expects a $15,000 fee with a seven percent deposit paid 8 weeks in advance. This yields a monthly outlay of $26,250 for deposits. The club will be charged a total of $375,000 for 25 show nights, which nets a total monthly cash outlay of $401,250. How many small business owners are comfortable with such a sizeable monthly commitment?
But wait, we’re not finished. This isn’t the only monthly expense. The staff of 60 employees needs to be paid. The house sound system is state of the art, which requires upkeep and constant updating, as does the lighting system. Both of these draw prodigious amounts of electricity, which pushes the power bill toward the ozone layer.
Oh, and let’s not forget insurance. Imagine what your rate quote would look like if you asked your agent to cover you for inviting 1100 people to your house, where they would consume alcohol and listen to highly amplified music. Every night.
The only way to overcome the stress of piloting such a large money-consuming machine is to sell tickets, and the only way to assure that fans will buy them is marketing.
“My background is retail,” says Orange Peel marketing manager, Liz Whalen-Tallent, “where most products have a nine month shelf life.
If, during those nine months, a product line doesn’t sell readily, you can mark it down. Or you can liquidate the stock entirely and make back some of your investment.”
“A rock show is an intangible product with an eight-week shelf life and no opportunity to mitigate the risk. If you don’t cover your investment with ticket sales you are guaranteed to lose money.”
Orange Peel’s customer demographic is 18-25 years old. Reaching this group is challenging, because they fall outside of traditional media: print and radio. These young adults are all about smart phones and social media.
Marketing surveys taken when fans buy tickets confirm the assumption: 55% of buyers find out about shows via word of mouth. 40% are reached via Facebook, and less than 5% report hearing about an event via traditional media, which is expensive.
Twitter and Facebook are very low cost, and most music groups rely heavily upon their Facebook pages to attract and keep fans. As a result, the Peel has one person dedicated to Facebooking and Tweeting.
“Social media is very important to us,” says Liz. “We make sure that our Facebook page has Interesting content, and that our posts have an Orange Peel personality: funny with a heavy dose of customer service. With this tool we can create a buzz around a show, run contests and link to bands’ Facebook pages.”
Interestingly enough, the very bands that are enamored with Facebook also insist that clubs like the Peel spend their own money on traditional media. It’s in the performance contract. Band managers want to see print and radio ads and insist on maintaining creative control over their appearance.
Liz’s job is to balance a band’s request with a sense of fiscal responsibility: why spend the Orange Peel’s advertising dollars on traditional media, if research demonstrates that it isn’t very effective?
If ticket sales are the Peel’s lifeblood then marketing must be the heart of the operation. Eight weeks to sell a show seems like a long time, unless you’ve never done this work before.
Everything that pertains to a show has to be approved by the band’s management team. A marketing plan is developed and sent to the band’s manager for discussion and approval. This includes: flyers, posters, Facebook events, radio ads, and print ads. Other show specific products – newsletters, web ads, ticketing pre-sale and graphic design must all be reviewed.
In the eight weeks leading up to a show, the marketing treadmill runs continuously. Because the majority of tickets are sold the day of a show, the club is never sure how many tickets they’ll be selling. Additionally, Asheville ticket buyers are notoriously late buyers. Another variable is weather. If, on show day, the weather turns sour, ticket sales can slump dramatically.
We’ve arrived at the point when you remember our risk mitigation exercise and how much financial risk a club takes on. Stressed out yet?
What about running sales, or offering Groupons: two for one deals. Impossible. Bands like to keep ticket prices consistent from show to show, for the duration of a tour. They do not want to offend any of their loyal fans.
Tickets fuel income, but a large portion of the organization is dedicated to ensuring a safe and high quality experience for everyone involved. The Orange Peel is responsible for the safety of up to 1100 ticket holders, the artists they’ve come to see, and to their employees.
For this reason, security is taken very seriously, as is head count. City ordinances, designed to keep us all safe in the buildings we visit, dictate the maximum number of people that can attend a show. A surprise inspection by a city official could trigger a concert to be halted if an accurate head count cannot be verified.
A large group of young people drinking beer and listening to high-energy music draws considerable attention from law enforcement as well as those responsible for controlling liquor consumption. The Peel is the only club in the city that actually enforces North Carolina’s “One Drink per Person” law.
To keep people from becoming quickly intoxicated, legislators passed a law, which forbids bartenders to serve more than one drink at a time to a customer. If I’m standing next to my wife and I am obviously ordering a beer for each of us, that’s legal. If, on the other hand, I order two beers but I’m standing alone at the bar, I shouldn’t be given two beers per the letter of the law.
This strict adherence to the liquor laws and the tight security has given some local youth reason to complain that the Orange Peel isn’t fun or “local,” that they’re owned by a large multinational corporation headquartered in a distant death star.
This couldn’t be further from the truth. The Peel and its parent organization are entirely local. The reason the club remains in existence is because they play by the rules, and in doing so, have maintained a safe environment in which the local populace can enjoy an evening of music…many times a month for the last ten years.
The economic downturn of ‘08 as well as higher fuel prices has conspired against the live music business by decreasing crowd turnout. Bands are aware of this, and have lowered their expectations as to the crowds the Orange Peel can attract. They have also lowered their rates, which make it easier for the venues to hire them during these lean times.
Success leaves evidence of sharp minds at work. The club has systems for everything: marketing, food and beverage, security, technical, financial management and safety.
Manufacturing companies ensure their futures by designing new products or diversifying the product line. For a music club, the situation is different. The managers at the Orange Peel scrutinize their systems, always striving to be better, and more efficient.
“My Dad has a saying, if you’re not getting better, you’re getting worse,” says Liz. “We work hard at not resting on our laurels, we try to make the experience for bands and their fans better every night.”
The next time you drive by the Orange Peel, remember this story. If you see a huge tour bus parked on Hilliard St., you’ll know what’s going on inside: a touring band has arrived to play; they’re probably setting up the stage as you sit at the light.
Meanwhile, the Orange Peel staff will doing what they do best: pulling the strings to help 1100 Asheville fans meet their musical heroes under one roof for an epic night of live music.