Small music venues embrace diversified strategies for survival
The COVID-19 pandemic has nearly extinguished America’s live music industry. In the wake of this calamity, live performance will lose an estimated $5 billion to $9 billion in revenue, shrinking in the United States against previous revenue estimates. When venues do return, there will be built-in capacity limitations, based on each state’s respective reopening policies as well as a loose set of federal guidelines.
Organizations like the National Independent Venue Association (NIVA) have emerged as tremendous advocates for live event venues. They feel mostly aimed at solving the sectors’ issues top-down (i.e. initially from the standpoint of 1,000- to 5,000-cap sites or larger). Yet due to lower overhead costs, many smaller venues will likely be able to open profitably at limited capacity earlier than their larger counterparts. Thus, it’s arguably ideal to think about successfully solving for the former group first and foremost.
Two small, 200- to 500-cap venues — Washington, D.C.’s Songbyrd Music House and Record Cafe and Asheville, N.C.’s Grey Eagle Music Hall and Taqueria — are soldiering into this unpredictable era, aiming for a balance of nimble experimentation and long-term sustainability. While they don’t yet offer fully-tested solutions, they are developing what could emerge as a relatively clearer roadmap for the survival of small venues and the live music industry at large.
In particular, these venues are turning into truly multipurpose spaces — blending in-person, socially-distanced live performances with other goods for sale (typically food and drink) while incorporating a highly-produced live streaming component — in the hopes of eventually returning to pre-COVID levels of revenue.
Diversifying into food & beverage and outdoor drive-ins
For a quarter-century, Asheville’s Grey Eagle has distinguished itself as the city’s longest-running, all-age live event venue, and also houses a locally-respected taqueria serving largely locally-sourced Latin cuisine. “We were already doing restaurant-style, seated concert events,” Russ Keith, owner of Grey Eagle, tells me. “We partner with local breweries for private dinners, and we’ve also done burlesque, drag shows, and comedy brunches.”
Grey Eagle’s longstanding success in Asheville and expansion of its taqueria business into a franchised chain has proven helpful during the pandemic. The company has recently expanded via a mobile taqueria food trailer and partnerships with BearWaters Brewing for satellite taquerias in Canton and Maggie Valley, N.C. There are also plans to co-brand Latin restaurants with Big Pillow Brewing in Hot Springs, N.C.
“If Grey Eagle’s [main Asheville location] were solely a music venue, I could only have ten people inside or 25 people outside,” says Keith. “But, because the taqueria is a part of our larger overall [Asheville] facility, I can do 50% of my overall capacity for both, [roughly 100-plus people overall].” The venue can also hold 50-person, socially-distanced shows on their patio, thanks to zoning laws that allow for different people to occupy space in various places safely.
Regarding monetization, Grey Eagle is working with Eventbrite to offer a more comprehensive combination of ticket types for their recent outdoor events. Socially-distanced table seating via Grey Eagle Taqueria six-tops, plus individual seat tickets similar to Grey Eagle Music Hall events, are both available.
Unique, diversified opportunities have benefitted Songbyrd, too. Songbyrd’s hybrid business model includes a “record cafe” featuring an espresso bar with a menu of sandwiches, salads and snacks, plus a limited, staff-curated, for-sale collection of vinyl records. A limited-capacity restaurant and bar with a full kitchen are also located in the same property, which is split between two storefront addresses and features a D.J. booth in the front window. The downstairs basement contains the “funky, basement vibe” performance venue, with a standing-room capacity of 200+ and a seated capacity of up to 100, plus a premium sound system.
“I think the more ways that you’re able to pivot with existing elements in your business and brand give you greater options for success moving forward,” Joe Lapan, co-owner of Songbyrd, tells me. “Songbyrd can have a food and beverage business, a vinyl record sales business, and finally, yes, a live music business.”
Like many other venues around the world, Songbyrd and Grey Eagle are also exploring outdoor concert formats like drive-ins. “I’m building out a drive-out ‘truck mobile’ with Adam Levin of Chuck Levin’s Washington Music Center to host a roster of local independent artists in different genres and offer ‘drive-out concerts’ in driveways, backyards, barbecues, crab feasts, whatever,” Lapan says.
Lapan is an ex-policy wonk — with a background working for the D.C. Government’s Office of the Deputy Mayor for Planning and Economic Development (DMPED) — and is cannily aware of how land rezoning, reuse, and redevelopment are just as essential to next steps for live music as new business models are.
“Pivoting in the live space involves the ability to create socially-distanced performance environments,” says Lapan. “But most venues are indoor venues, and sourcing for outdoor spaces is hard because most smaller venues don’t have access to capital to do that. Public policy is solidly divided between long-term policy and immediate full-scale creation of unique outdoor spaces.” To this point, D.C. has recently flirted with street closures in D.C.’s Adams Morgan neighborhood, plus the activation of parking lot space in front of the soon-to-be-demolished RFK Stadium.
Open-use property opportunities also abound in Asheville, which is considerably more rural than Washington, D.C. Grey Eagle was already making smart use of these spaces prior to the pandemic; Keith notes that the venue already had an off-site 25th-anniversary concert in June 2019 at a site at Lake Eden, in nearby Black Mountain, N.C. Starting in September, Grey Eagle hopes to hold “Grey Eagle Presents” shows in a huge parking lot in Maggie Valley, N.C. as well.
The real role of livestreaming
Even though the average concertgoer was spending nearly as much on drinks as on their ticket pre-COVID, it’s haphazard thinking to presume that all venues built on a model where food & beverage service were secondary revenue sources can just invert their business plans in a matter of months to focus primarily on food, with live concerts as an adjacent income driver.
Livestreamed concerts with limited, socially-distanced attendance in person — or no attendance at all — quickly emerged in early March as a temporary stand-in for in-person shows, and venues are investing more in the format to keep their communities engaged online. Although the demand for livestreamed content is still an open question, there’s actually a precedent for the format in traditional television: As Songbyrd’s Lapan notes, “programs like Saturday Night Live have set a broadcasting standard for shows being able to utilize distanced sets with a smaller crowd that we can ideally follow.”
Grey Eagle has been broadcasting well-shot live concerts via Facebook Live multiple times a week for the last three months. “I have a great videographer who sets up an intimate-looking, four-camera shoot,” says Keith. “My engineer is still on the board, mixing our sound through our speaker system and feed. The secret is that there’s not much open space shown. We keep a tight focus [on the artist performing].”
That said, the revenue that these venues are getting from livestreaming is largely lacking compared to the amount that organizers need to invest in producing these shows.
“Sadly, our livestreams have lost a lot of their initial interest,” says Keith. “The tips and viewership are slowing down. As a venue, it wasn’t profitable for me to run those live streaming concerts at all. The tips go to the bands, and there’s still the overhead of turning on lights, paying the video guy and sound operator. I knew it wasn’t going to be profitable, but we learned from it … We are now more so doing these largely to keep our customer base and our local and online music community still engaged.”
Like Keith, Lapan has Songbyrd ready to engage as a livestreaming leader, but is also skeptical about the format’s revenue potential.
“At some point, we, as venue operators, have to wonder if we’re in the live event business or the television production industry,” says Lapan (an apt question given his SNL analogy). “For instance, Songbyrd just invested $8,000 in livestreaming technology. We spent on two robotic, remote-operable pan/tilt/zoom cameras, specifically dedicated servers and open-broadcasting systems for distribution. I think our first fully-streamed on-site, empty venue concert looked and sounded pretty good. We partnered with SPIN Magazine, and broadcast it via their Twitch stream. We didn’t monetize it, though. Our next event has a ‘suggested donation’ ask.”
When asked about what Lapan perceives to be an ideal solution moving forward, he pauses, sounding as if he is adjusting himself in a chair and thoroughly preparing his thoughts.
“I don’t know if this is perfect, but it’s something I’ve been thinking about,” he starts. “Look at, say, ESPN as a concept. It’s 10% live games, and 90% recorded content and T.V. shows, right? We might need multiple venues to develop an aggregated live music broadcast channel. Ideally, it’d package livestreamed content in attractive ways that many of the live platforms like Twitch, YouTube, VEVO, Instagram Live, and Zoom cannot. I mean, I don’t know. But it feels like it’s something.”
Lapan’s progressive broadcast concept actually doesn’t feel far-fetched. In fact, upon hearing this idea, I made a quick scan through my cable offerings and saw that channels like AXS TV and MTV Live (formerly Palladia) already exist. Online, the popular Verzuz Battles have expanded their platform presence from Instagram Live into an official partnership with Apple Music, while older initiatives like VuHaus — in which a coalition of public radio stations across the U.S. showcased their in-studio live sessions with up-and-coming artists on a shared, embeddable video platform — provide a model for a more collective offering.
Also, Keith made mention to me of “popular jam bands” that were interested in playing at Grey Eagle for “four-night residencies” in 2021. Having acts that wouldn’t typically play in a space like Grey Eagle be available for what could be presented as once-in-a-lifetime performances is undoubtedly a draw worthy of groundbreaking broadcast concepts like these. If the previously mentioned National Independent Venue Association (NIVA) is successful in its ask for $10 billion in small-business grants from the U.S. government, this broadcast concept could be more financially feasible.
What about long-term fundraising?
While some of the above initiatives can help music venues weather the short term, venue owners are also grappling with the pandemic’s significant long-term implications for their businesses.
The RESTART Act and Save Our Stages Act, both recently introduced in Congress, would provide much-needed federal assistance to independent venues, especially to those that continue to have neither revenue nor a set timeline for reopening. But given that the benefits of federal aid often take several months to get into the hands of everyday business owners, it is not necessarily the only path forward.
“My most significant question has been trying to extend the life of this venue, month by month,” says Keith. Grey Eagle recently sold 300 tickets at $30 a pop for a “Golden Ticket” raffle, which offered a lucky winner the chance to win free admission to every show at the venue for a year once shows come back at a more regular pace. An unnamed angel investor also matched the raffle revenue. “We have the ‘Save Our Stages’ golf tournament coming up on August 30, where we’ll raise another $10,000 to $12,000,” says Keith. “I also refinanced my house, but I don’t think I’ll have to dig into that money.”
Keith projects that Grey Eagle will be open for in-person live shows by early spring 2021, with these larger fundraisers and restaurant partnerships keeping the venue afloat in the meantime. “These are scary times, but our responsibility, as live venues, is to, however we can, continue to present music in the time in which we’re living,” he says.
Lapan suggests that larger promoters may have a role to play in subsidizing shows for their smaller subsidiaries — e.g. for venues like Songbyrd that are partnered with Live Nation. “Unless a larger arm like Live Nation, IMP or whoever gets involved as a promoter/underwriter arm [helping to subsidize concerts more significantly], we’re going to have to get into cross-marketing goods and services — a streaming ticket with the ability to upsell for a pick-up or delivery meal from our kitchen and drinks from our bar to enjoy at home, and/or an album, something like that — to make this work long-term,” he says.
In the meantime, regarding the live music industry’s next steps, Lapan reiterates that nothing is for certain. “Nobody’s wrong or right at this point,” he says. “in the post-COVID live streaming concert era, the demand for shows, the potential size of your audience, and the revenue capacity are unknown. There are unlimited possibilities, and I’m preparing my venue to participate in any of them.”