Sofar Sounds has made a name and a business for itself by staging “secret gigs and intimate concerts” featuring emerging artists for an invited, engaged audience — but as detailed in an article in the Talkhouse and a subsequent report in Variety, its model is problematic because it has generated millions in funding yet relies largely on unpaid volunteers, dubbed “ambassadors,” to work its events, and pays artists just $100. The article led to an investigation by the Department of Labor regarding these practices, and the company has embarked upon a long-term program to bring its practices into better compliance with state and federal guidelines.
Following on a plan to hire paid part-time crews to work at its shows, CEO Jim Lucchese today wrote a blog post explaining the income splits at the company’s shows, and also wrote, “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.” He said an initial goal is to raise the artist/Sofar split at concerts (which average three artists each performing 20-25 minute sets) from 63/37% to 70/30%.
He also says that starting in February, the company is “Increasing artist compensation for larger shows, while still guaranteeing each artist $100 for the smaller ones,” a process it will re-examine every six months; it will also establish an advisory board to re-assess its practices periodically.
In the post, Lucchese lays out a complicated description of the model whereby a majority of cities hosting Sofar events (approximately 375) operate “independently,” while a smaller percentage of cities (approximately 30) “are Sofar-operated and host the majority of our shows.”
Using one of those 30 cities, Boston, as an example, he then breaks down the income. He says Sofar’s 37% of the profit goes to the company’s costs for ticketing and marketing.
The subject of “Evolving artist compensation” is light on details but poses the question, “Can Sofar pay [artists] more when we sell more tickets?”
He says, “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,” before getting into other, less-related improvements the company is working on.
The post concludes, “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.” Variety will have more on the situation as it develops.