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We are thrilled to share highlights from our latest Make More Money Live webinar, where we hosted a spirited fireside chat with legendary music industry analyst and critic Bob Lefsetz. For 38 years, Bob has been the voice behind The Lefsetz Letter, the go-to resource for the music industry. During our conversation, Bob offered hot takes on the state of the independent venue, touching on current topics and offering wisdom to venue owners.
For those who missed the live session, you can check out highlights below, and watch the full webinar recording here with key highlights at:
One of the points Bob discussed was the shifting economics of running a club. "Alcohol revenue - the economics of the club is changing," he noted at the 1:12 mark of our recording. Bob emphasized the importance of understanding and adapting to these changes to remain profitable. Key takeaway: It's not just about selling tickets; it's about creating an experience that brings people back and makes them spend.
Bob stressed the importance of being in touch with trends in your audience. "Your research is your children, niece, nephew. Understand the demo," he advised. Knowing your demographic allows you to tailor your offerings and marketing strategies effectively. This understanding can help you book acts that resonate with your audience, connect audiences that want to see the acts you’re booking, and fill your venue.
A significant theme that emerged from our chat was the dual role of a successful venue owner. You can’t just be a music lover/lifer, and you can’t just be all business—you have to be both. This means balancing the passion for music with the practicalities of running a business. It’s about knowing the landscape and demographics, reading trends and the market, and genuinely caring about the community you're creating, all while employing the skills and tools of a savvy entrepreneur.
Lefsetz nailed it when he said "You have to be more savvy as a talent buyer than ever before." This involves developing a deep understanding of which acts will draw what type of audience and designing offers that reflect their market value. He went on to advise, “Understand what a show is worth, and make a deal to reflect that.”
At 58:00, Bob discussed the role of clubs in being tastemakers in the current age. "Clubs are where careers are made," he asserted. Despite the fragmented nature of the music industry today, and whatever the charts may say, clubs remain critical in launching and sustaining artists' careers. They are the platform for new acts to connect with audiences and build a following.
Bob emphasized that "everything is diversified, fragmented, and unique, so each concert experience needs to be personalized too." This means offering unique and memorable experiences for your patrons. Whether it's through VIP packages, themed nights, or exclusive performances, personalization can set your venue apart.
Looking ahead, Bob sees "more opportunities for independents to thrive." He encouraged venue owners to "play your own game, don’t compete with AEG/Live Nation. Find the talent that they don’t want to buy." By focusing on niche markets and emerging acts, independent venues can carve out a unique space in the industry.
Bob Lefsetz provided his well-known unfiltered thoughts into what it takes to run a successful live music venue today. From understanding your audience to navigating deals and creating memorable experiences, his advice is a must-hear for anyone in the industry. As Bob said, "If this is a hobby, get out!" Running a venue is demanding and requires dedication, savvy, and a deep understanding of both music and business.
Stay tuned for the announcement of our next Make More Money webinar, where we bring industry experts to share their knowledge and help you thrive in the live music business.
Make More Money: Talent Buying
Make More Money: All Things Ticketing
Make More Money: Add-Ons and Revenue Generators
Make More Money: Unique & Themed Events
Make More Money: Event & Tour Marketing
Jeb Banner: All right, let's jump in. Bob, it's great to have you here. I think everybody on this call and this webinar knows who you are, but I recently listened to an interview with you where you gave a quick rundown of your background working with Iron Maiden and the fascinating stories there, and then going out and spending 5K on some computer equipment and getting the newsletter going. Was it 35 years now?
Bob Lefsetz: Yeah. It's 38 years, actually. 38 in September. I can't believe... The time flies.
Jeb Banner: Yeah. Well, I got to tell you, it's a wonderful resource and you just seem to be very prescient on many things, and I watched that great interview with you and Gene Simmons and how you-
Bob Lefsetz: Jeez.
Jeb Banner: Back in '09 really called out Spotify as, "Hey, this is going to be a sea change for the industry." And it certainly has been. But I'm curious to start off, how are you consuming media? Who are you listening to? What newsletters are you subscribing to? How are you staying educated?
Bob Lefsetz: Well, let's start from beginning. When you talk about consuming, it's about streaming. Okay? There is a physical business. The charts are totally screwed up and manipulated because they weigh physical and full album sales on iTunes and sales of singles on iTunes far beyond streams. And of course, streaming, there's on-demand streams and radio streams. I don't know if we need to get back there, but the vast majority of people are consuming their music via streaming. Now, you have YouTube. YouTube gained traction in music because Spotify would not launch in America until they had all three major label groups, and in the intervening about two years, YouTube gained market share in music. Having said that, you will see in the paid sites, which are really Amazon, Apple, and Amazon, certainly in the United States. What was titled, which they keep rebranding, which is originally a Norwegian company. That's a de minimis operation. You have Deezer in France, it really dominates in France. That's the only place.
But you have to know that people are consuming via streaming. Why is this important? There is not a heavy lift. Everybody's got a phone. Everybody can immediately hear a song if they want to. So distribution is king. People always say content is king, and we can certainly see that today. You can a great song and it cannot have any penetration because there's so much in the landscape. However, if someone can't hear it at all, it doesn't matter how good it is. Now, the story this week is the show that stars the star of Breaking Bad. He was in Malcolm in the middle before. He did a show for Showtime, and they did very poorly. They just put it on Netflix. It's their number one show, breaking records, proving that the platform matters.
So as far as I go, when it comes to music, I stream. Spotify is the dominant platform. Spotify used to work on a... I don't know how deeply you want to go here. Spotify used to work on a P2P level. It no longer does. Don't assume P2P means piracy. That's just technology. What I like about Spotify, the technology is the best. If you want to rewind, go forward, works instantly. Okay, Apple. Apple has a much older demo. You will hear all the time, "Well, a stream pays more on Apple." First and foremost, there is no per stream payment. You have to get that out of your head. There's a pool of money that is divided by streams. The quantity of streams is lower on Apple, therefore, a stream is worth more, so you're getting more in a smaller market. The vast majority of paid listening in America is on Spotify.
Spotify is my default. I certainly use Amazon when it comes to Alexa, et cetera. Amazon also has a very good high-res, which at this point Spotify does not. I like Qobuz, Qobuz, however you want to put it. That definitely has the best sound. I was hip to it by Autofiles, people in the business, it does. Now the interface and how fast it works, is not quite as good. It's not terrible. Apple, I don't like their interface as much. They certainly have high-res. It's really not radically different in sound, from Amazon. In order to hear the true high-res, you need an additional piece of equipment, which I have, most people do not have. But we have the 320, you can go lower on Spotify. The 320 kilobytes per second. You have CD quality and beyond CD quality, beyond CD quality, you need an interface on your computer. You get one as cheaply as $80 or so. Most people do not have that.
So that is where I get my music. Where do I get my information? I'm a voracious reader. That's an understatement. I pay for the New York Times. I pay for the Washington Post. I pay for the Wall Street Journal. I'm a subscriber to the Apple News, plus we can get pretty much every other publication. And in terms of music, business information, if you want to know what's going on in the touring business, yes, Pollstar is the default. I certainly get Pollstar. I go to their website every day, see if there are updates. I get the physical magazine every week and I certainly pore through that. A lot of these stories have already been online, but certainly all the grosses, et cetera you find there.
In terms of information on music, I get a bunch of newsletters. This guy Ryan Downey, you have to pay for this. He is the key guy when it comes to Hard Rock. The IMS, which is the electronic music world. They have a newsletter, which I get. I get a newsletter every weekday from England called Record of the Day. They do promote a record every day. I don't find that helpful, but they have a compilation of stories from all over the world. You always find a couple of things that you did not know. I get a, this is also paid service, Muzak, Music Ally, or music lead. Don't confuse that with the predecessor of TikTok. This is also in England. They have usually four stories a day, sometimes six and a little explanation of that. If I really want to go through, there are other newsletters I get, most of the stuff is horseshit and distortion.
There's this guy, Digital Music News. These guys want hype. Some of these people are friends of mine, but this is just like conventional news. I'm on my high horse on this all the time, but I'll go very simply. No one has as many boots on the ground around the world as the New York Times. If you tune in MSNBC, you tune in Fox, they will immediately say, "Well, it's said in the New York Times today..." What you find online especially is commentary, opinion, which is what I do too. I don't break news. But unless you read the main source, forget it. Now, in terms of trade publications, Billboards... There were three trades. It was Billboard, Cashbox and Record World. It's only been Billboard for a long time. Billboard has gone up and down over the decades depending on the editor. The Billboard survived on endemic advertising, meaning advertising from the record companies and other music-related operations. In the Napster run-up of the turn of the century, that all dried up.
Billboard is now a consumer-facing publication. Generally speaking, worthless. If you want to read it, you can read it online. They have a daily bulletin, which I get. Which can go on for 20 pages and there's a lot of hype, but there's some interesting stuff there. But anything really important you tend to find out anyway. There's a publication called Hits Daily Double. You can go to their website. They have a lot of business stories. Generally speaking, the stories are based on who is paying them. The interesting thing is they have done a chart for years that never got any respect. It is now getting respect and you'll see it quoted in the mainstream news. Whereas for a long time SoundScan, which is now called Luminate, was seen as the default. But once again, all of these charts, even one in Pollstar, which they talk about, if you go into the revenue charts, let's not forget that we're assuming people are reporting to Pollstar and the numbers are accurate.
If you see the gross, great. If you see their chart about what's hot, I don't find that helpful, and I find the raw chart unhelpful in Billboard. First of all, albums are not the way that most people consume music. That is a completely manipulated number. I could explain the number of versions... Taylor Swift who wrote a song about me, so I put that in the mix because I'm going to go a little negative here is she had a very successful album. But to maintain number 1 for 12 weeks straight, she released in excess of 30 different versions of that album appealing to the hardcore customer, and since complete album sales and physical sales are way more than Streams, it appeared to be number one. Although Eminem beat her out this past week.
Jeb Banner: Yeah.
Bob Lefsetz: If you want to look at what the biggest record of the past year, really the past four years, is Morgan Wallen. Morgan Wallen blew himself up with a couple of things. Of course, of course the racist comment, but Morgan Wallen sells stadiums. People forget who've been in this business a long time. There are 100 million more people in the United States than there were in the 70s. And what I bring up here is people that other people hate can do incredible business, which is not the way it used to be. Also in the 70s, there were a number of stadium gigs, I'll just finish this point. And then we thought there would never be again, but because of the demand music, there's more stadium gigs than ever before.
Jeb Banner: Yeah, I want to dig into that a little bit. I'm going to throw a quote at you here. That was great. Thanks for unpacking all the things you're consuming and how you get your information. I know you talk to a lot of promoters too. "We live in the era of niches. When it comes to new product, you must release a ton of it, because you never know what will resonate with the public." People are listening to more music than ever. I remember seeing Daniel Leck speak at South by Southwest in 2010, and he said, "Music will be like water, available everywhere you go." And it certainly has turned into that. On our phones, everywhere we go, there's music. But also it's more diverse, in terms of what people are listening to.
I've been looking a lot at the Spotify top 50 and there's this Brendan Boone I think is the top artist right now. Never heard of him. Has a billion streams I think of one song, 300 million another. Turns out he's coming to Indie here soon. But we also have all of these other artists that are operating at a smaller level. In other words, they may have 10, 20 million streams on their songs. They may have 100,000 people following their Spotify page. And it seems like in many senses we're still far past the days of radio and MTV where it felt like we were all consuming the same thing. At least that was my experience growing up in the 80s. It felt like we were all at least somewhat on the same page. How does this play out? We have these legacy arena acts. We have the Morgan Wallen's and the Taylor Swift's that are doing that. We also have this huge crop of artists.
I saw a quote recently in Bloomberg that in 2024 there was 80 new artists in the top 50 in the first six months. That's a tremendous amount of influx of new artists. My thinking and my curiosity is could this be really good for our customers, these smaller venues where they might not have enough to fill out a 10 to 20,000 shed, but they've got enough to pack a 500,000 cap room. Do you see that as a trend that we're going to be seeing more of? Is it you've got these really big fan bases, but they're... Sorry, we have really passionate fan bases, but they're smaller, but they're still going to turn out, but they're not going to turn out like the Morgan Wallen all the time. Like you're saying. Like Morgan Wallen, even if he pisses off half the population, he still has, as you said, 100 million more people than the 70s. This is to me a potentially-
Bob Lefsetz: You got a great number of things going on. You get a lot of people complaining they can't make money on streaming. No one is entitled to make a living playing music. It would be prior to the internet era, these people couldn't even get a deal, they couldn't get distributed. So a lot of these acts, the 60 to 70,000 tracks that are added to Spotify every day, no one cares about that. Okay. Let's go in the other direction, and you mentioned this and did a good story of this. The hit acts have less reach than ever before. One of my great lines... And Taylor Swift is as big as it gets. You go anywhere and you ask, "Name two songs from the new Taylor Swift album." They can't. Whereas if you go back, everybody knew Satisfaction, the MTV songs, et cetera. So if you look at it from the act perspective, the hardest thing is getting noticed.
It used to be a controlled marketplace with radio. Terrestrial Radio still has a great... It's like network television. Advertisers, they're becoming more sophisticated now, but for a long time would overpay because that's where you have the greatest mass. Even though it might be one-twentieth, what it used to be. Major labels who are not sophisticated are still pouring their money there. How are acts breaking? Acts are breaking the word of mouth in social media primarily TikTok. Now, something has completely changed. It used to be you had to work your way up the ladder. You started in clubs, you went to theaters, small, the larger theaters, arenas, whatever. Sam Smith, about 10 years ago, he had one hit and he played arenas on the very first tour and did incredible business. So the hardest thing is getting noticed. So if you are running a smaller venue...
Now let's be clear, they call the Wiltern a club. Now, that holds 2,000 people. I think of a club as certainly usually 350 to 500, whatever. But as we all know, it has been well established. One of the problems in the club business is alcohol revenue. Younger generations don't drink as much, so you have the economics of the club, which is a little bit different from do you have talent that can draw people? So what you need to be is in touch with both trends in your audience. I have this friend Dan, excuse me, Don Strasburg runs Rocky Mountains for AEG. He concentrates on what is selling tickets as opposed to the Spotify top 50. And all those will be mentioning acts that other people do not. I was talking to Gary Spivack on a podcast last week, these hard rock festivals. Yes, there are things that are doing well there that won't do anywhere else.
So if you have a club, there's many different ways of running a club. Do you only open when you know you're going to do good business? Are you going to be open seven nights a week? You're going to have main talent? Et cetera, et cetera. It is incumbent upon the venue to do enough research to find out what's really going on. Because the act and the agent and the manager will lie just to stay there. One point, back in the days of physical, people would say they sold 100,000 albums. If they sold 100,000 albums, maybe they sold 1500, maybe. I knew this guy, he's now dead. We have Ruthless Records with Eazy-E. And he goes, "My company, my number." And people make this stuff up. So it's really about calling your other people, et cetera, and don't be afraid to be the bad guy.
You have what the act wants. So if it's economically not advantageous to you to pay them too much, do not. They're going to complain no matter what happens, so make a deal that works with you. Are there more genres with success than ever before? Are there more people? Yes, I would say there are more opportunities for independent acts. I hate to whip out the classic cliche is there are only bad deals when people lose money at a show. Yeah. There are so many venues, there are nonprofits, there are people playing house concerts. I don't know everybody in on this call. I don't know where you are in the place, but you have to own where you are and see certain acts. If you book them, no one will come. Or their legacy act. Legacy acts, I'm talking about, not the ones playing arenas. A lot of them are playing house concerts, et cetera. And you got to say, are you competing with those people? So it's really you have to be more savvy as a talent buyer than ever before.
Jeb Banner: Yeah, so let's dig into that a little bit. So you've got a new artist that's hot, been out a year or two, looks like they've got great streaming activity, and I think anybody in this call, this webinar will tell you that streams don't always equal tickets and they haven't... You used the example of Sam Smith. That's pretty unusual to have your first run be stadiums and arenas and sell it out. How do they even start to figure out what kind of offer to make? Because a lot of people have been burned by-
Bob Lefsetz: Well, you've got a lot of different statistics. Let's talk about raw streaming numbers. The Spotify top 50 generally speaking is pop and hip hop. Do not associate that with ticket sales. There are a lot of acts there that will not sell any tickets. There are a lot of genres that do not show up. Going back to your earlier point, now the numbers keep going up because you have cumulative because Spotify has been extant. And of course in case people don't know, you can see the numbers on Spotify's desktop version. And the other services really don't reveal these numbers. If you are an independent act and you have 10 million streams of anything, you have a footprint. Believe me. Now, you want to see how old the track is maybe. 10 million, people have to actually actively click.
The other thing you might want to say occasionally is why is the number on one track so high? I remember there's this track, I Need a Dollar. Which is at this point, like 14 years old, which is a great song. And I said, "Well, turns out it was featured as part of a show on HBO." So sometimes the number is anomalous. You have to see where the numbers... You'll hear all these complaints with acts that want to be signed by labels, "Oh, they want us to have all the data and the socials." Well, that is the most important thing when it comes to booking talent. Very different from a record company. Also, certain genres do not stream well. Rock and hard rock do not stream well. I can analyze that all day long. Up until recently, country did not stream well. So if you find an act that's got multiple tracks in seven digit or eight digit figures, there is definitely something there. But the acts with five figures, 30,000, 60,000, man, you got to be wary.
Jeb Banner: It's almost like there's a bit of a equation here of country streams might be equal to this much market demand and then pop streams might be equal to this much market demand. We just had a question of which genres really output the best ticket sales.
Bob Lefsetz: Well, if you want to go by genres, just because you have a pop hit, that does not mean you can sell tickets. And if you're in the pop world, we had J-Lo canceling her tour or whatever. If you're dependent on hits, you must have a hit. Country is always seen as a career business still driven by terrestrial radio. It is a different marketplace, irrelevant of whether the streams are. First of all, the audience does listen to terrestrial or does listen to Sirius and they are familiar. Where in these other genres, they may not. Don't forget, Top 40 radio now plays what was a hit first on streaming. The last time we saw this was in the 80s with MTV, where whatever MTV played, Top 40 didn't. Country Radio creates hits from the get go. Yes, every genre is different, but it's not that... You could talk all these acts.
Okay, for 10 years we've been hearing about Brett Dennen, I don't really think he is... I don't have anything against Brett Dennen, I didn't love him, but it never broke to another level. Jason Isbell went solo, put out the first album, incredible reviews, incredible press. When it hits adults, normally traditional press means nothing. Okay? But he has not grown beyond that. He has not put out the album beyond that. That doesn't mean he can't sell tickets, but how many tickets can he sell in your market? Then you have country acts. The woman from Sugarland, they haven't really been in the marketplace for a long time, so that's not a good example. But if you've made it in country, there is still a demand for you. Same thing with rock and alternative. It's once you get into the Top 40 world that you really have to be wary. The other thing you have to do is you have to ask the demo who buy the tickets. Your research is really your children, your niece, your nephew. They are incredibly helpful on this.
Jeb Banner: Yeah. I have three daughters that are 23 to 18, and I'm constantly talking to them about what they're listening to. And a lot of times they know the song, but not the artist. They love the song. It's on a playlist. They're listening to it, but who is this? "I'll look it up." They know every lyric. So if that artist were coming to town, they may not even know. The thought I have is that a lot of the country and rock artists kind of work their way up through that more traditional club-to-arena cycle, and that speaks to the terrestrial...
Jeb Banner: Cycle and that speaks to the terrestrial radio role as well of they're working. It's almost like the old model still exists a little bit, especially in the country market. Would you say that's sort of what you're seeing as well, is that?
[00:25:04]
Bob Lefsetz: The old model is really falling apart. The acts that do not stream well on streaming services that are not in the top 50 are all building it on the road. Okay? Whether it be acts that are almost legacy acts at this point, Tedesky Trucks, etc. These were built by word of mouth on the road. Usually the band members, not Tedesky Trucks, they literally toured in vans everywhere and they built an audience. The audience will come to see them and there's a hardcore audience. Generally speaking, it will not show up on streams.
If you look at Phish, it certainly doesn't show up on streams. By the same token, talking to the manager of Phish, they say, we don't really know how many Phish fans there are. Might be the same 20,000 coming to absolutely every gig. So every market is different, but I mean every buy town buyer is different. If you want a little bit of insurance, know you're going to do business. The other thing is you can get all these statistics on streaming services. Spotify, they will give your report where the people are listening.
Jeb Banner: For the artist. They will.
Bob Lefsetz: Every act has access to this for free. If you're unsure, ask the act for all the information, the listens in your particular market and that will help you. And if they're reluctant to give you those, maybe you should be reluctant to buy them.
Jeb Banner: Yeah, that's great. Can I throw another quote at you?
Bob Lefsetz: Sure.
Jeb Banner: There are careers to be had in the music business, but they are for lifers. This really struck me. One of our employees came across this quote from one of your letters and I thought, first off, do you think that's sort of something that's new? It seems like in the past you could kind of go into a record label career and whatever, but it feels like lifers now are the people that are really ride or die with running a venue. It's just, it's a calling for them. I'm just curious, you unpack your thinking of is that really the only class of people that can make it work in this industry?
Bob Lefsetz: Yes.
Jeb Banner: And what is a lifer in your opinion?
Bob Lefsetz: Yes.
Jeb Banner: Yeah. What is a lifer?
Bob Lefsetz: It's too hard. Let's talk about, I mean, I remember when you couldn't even get a job in the seventies at Tower Records. Garbage business, it happens to pay pretty well. People are not lining up unless it's a union job to work on garbage trucks. People are lining up to work for free in the music business. For free. Andy Slater manager now, ran Capital Records. He started out schlepping equipment for Hot Tuna. I mean people for free just to be involved.
The other thing is that great line, and he's sort of a prick, but Jeffrey Katzenberg when he was number two at Disney, he said, "If you don't come in on Saturday, don't even think about coming in on Sunday." I have a friend who runs a label. This gets into the millennial Gen Z mindset. That's not really the point I'm making. Okay. He said if it's a week, he had an act coming to L.A. This happens to be in New York.
Basically go pick your act up at the airport, take him to the hotel. You got to picture the fact that it's Saturday, Sunday. It makes no difference. So you have to work around the clock. You get to the point as you get older where they can find someone to work longer hours for less money, which is why it's hard to stay in the business.
For a long time, they shuffled the deck ad infinitum on the label side. Now people have extended years there. Historically, it has always been a lifer business on the live end. It really cracks me up in that you'll talk to talent from England and we'll talk about their friends with promoters and they see them once a year or once every other year. That is the nature of the business. First I said, how can that be? You're living in town and see these people all day, but it is a floating world where these people are really friends.
I don't want to say if you were friends with someone, you're therefore going to get the next gig. We know with Live Nation and AEG that it's not like the old days of premier talent, but being friends with everybody involved. It's like this guy worked forever and then all of a sudden come to Lock and Poke. You are the manager. I remember 20 years ago when you were the other manager, you're a 60 odd year old English guy. It is always the same people. It is too hard and they're squeezing people out. Now on the live end of it, if you're in a long time, can you make a lot of money? Yes. Can you make a lot of money owning one club? We could talk about all the clubs that have gone in the business, even in New York City, the bottom line.
So just because you are running one thing, you have to be an entrepreneur. If you are on the other side, if you are on the talent end, unless you are associated with the talent, you are expendable. People say, well, I have great taste. You're a million people with great taste. Bring me a hit act. Okay, and you're attached to that hit act. Although they might leave you, the doors will open.
On the live end, if you are not an entrepreneur, you will never succeed. AEG, Jay Marciano. Jay Marciano dropped out of college, started a musical instrument shop in Boulder, Colorado where he slept on the floor, didn't have an apartment. Okay. Now he makes how many millions over there at AEG. There were a lot of steps along the way. If you know the story of Michael Rapinoe, he worked for LaBotte, which is a big beer company in Canada. They had a library there. He literally read every book in the library.
Not anybody else there even went to the library and the higher-ups figured this out. Now he ultimately left that and had his own concert production company. I don't want to go will go through it here, but everybody in the live business who was successful is entrepreneurial. If you were a cog in the system working for somebody else, you might lose your job. You'll never make that money. Look at all these venues. Most of the venues, the talent buyer is not the same person he was five, 10 years ago. Either because people don't want to do it anymore or they move on because they realize there's no future in being a talent buyer. You have to find another thing. I mean a friend of mine who does all the production from Metallica, he started sweeping floors in a club, but he figured out how to go. If you are not willing to work round the clock, I mean you just can't make it.
Jeb Banner: Let's talk a little bit about the club market and sustainability there. You mentioned a lot of clubs going out of business. We're seeing trends around increased venue groups, clubs basically joining together under single ownership for efficiencies. We're seeing certainly in the market, increased performing arts venues that are showing up in a lot of cities that are non-profit seeking grants and funding. We're also seeing venues that are bringing in food service to be able to then have a secondary line of revenue and all kinds of different creative things they're doing in terms of table reservations, et cetera.
What do you think, I mean, looking at zooming out a little bit, if I'm running an independent venue, what are the moves I need to make as an entrepreneur to make sure I'm still around in five, 10 years and is it banding up with others to form a group so we have efficiencies? What kind of moves do you think are working and what do you see out there that shows a sign of success?
Bob Lefsetz: Number one, you need to own the real estate. It's just that simple. It comes down to the economics. Then you have to see in your marketplace, who is your demo? Are you appealing to college students? Are you doing people with no drinking? Are you more of a supper club? You know your audience better than anybody else. So traditionally in clubs, and I know Mark Geiger is on this end, et cetera, it's about savvy individuals. I mean Albert Grossman, who managed Janus Joplin and Bob Dylan, the list goes on and on. He started at a club in Chicago. Now he did not stay in the club business. Inherently the margins are going to be less of the club because you can only put so many people there. So I think when it comes to the club business, it's got less to do with... First of all, if you are in the physical goods business, electronics, et cetera, the independents all form buying groups.
If you can align with other talent companies, other clubs and make an offer, that is not the nature of club business, maybe there's an opportunity there. I don't think that's a giant opportunity. Somebody can make it work where they can get a commitment and get everybody a lesser fee. Fine, but this is not rocket science. How big is your community? Is it a college town? Are people there 12 months, a year? How close is the next venue? Are you on good? With a lot of these acts, it's about routing. Oh, you're in between this town and that town? We'll play for less for you. We'll play on a Monday night. Can you sell tickets on Monday night? I do not see the synergy of lining up. That's one of the great things about the club business is it's run by individuals and it's cutthroat and therefore the audience knows.
Now, this is on a much higher level, but on AEG, they built the Mission Ballroom. The people who wanted to build it in Denver saw it as a slam dunk. Not everybody was convinced above, turned out to be more than a slam dunk. People want to go to that venue. Before that, there was Live Nation's Fillmore in Denver. So it does come down to the venue and how many people there and then your marketplace.
We have the Whisky in L.A. Depending on the account, maybe 250, 350. They don't have enough capacity. This is Los Angeles. Not every market is Los Angeles, capacity to pay day talent. So what they do is they do underplays with major talent who want to play there and they tap generally speaking into the hard rock market. Hard rock has very loyal fans. This is Los Angeles. When people come to make it, I'm not saying if your club is in, even in Minneapolis, Kansas City, you may not have enough of a scene, but you got to say, what is happening in my town?
Talk to the people at School of Rock. I don't want to overemphasize this because a lot of people, they don't need this, but if you're starting up, there are a lot of people who will bring business to your building that might pay dividends. The School of Rock always does a concert at the end of the season. You're not going to make any money there, maybe off the parents, but you're going to bring all these people into your venue. They're all dedicated to music. There are things you can do that. Generally speaking, I was on the phone with somebody yesterday. I was talking about all alternative revenue sources in like the ABBA show in England and there was the hologram show before that. Really comes down to the talent on stage. People will pay anything and tolerate terrible conditions if that is an act that they want to see, so it's not-
Jeb Banner: Can we flip that? Yeah. Can we flip that a little bit? What role do venues play clubs, particularly in this current world with the streaming and TikTok and everything else to be taste makers? Do you think about the history of Whisky?
Bob Lefsetz: I don't think you can afford to be a taste maker. Live Nation, AEG, they can afford to be taste maker. A lot of these people, your listeners, whatever, they only have one club. If they can get a reputation as a taste maker while making money, great, but if they say, I'm going to turn my audience onto something. Now, there are live music towns, especially college towns where people will come out no matter what. Generally speaking today, they will not. In addition, why is someone going out? They want to have fun. They want to meet the opposite sex. They don't need to do that in the live music venue, and I would argue it's worse in the live music venue.
So it has to be a draw and you can quantify this if you have a club saying, I'm going to... You talk to everybody in this business, they started out as a promoter. They bought an act they thought was great and then they lost their fucking shirt. This is business, especially on the club level. It's not friends. Whatever. You have to be incredibly cutthroat. Your acts will never thank you because inherently to run a business you have to take most of the money and if they're successful they're going to leave you behind. That is just the nature of the game, so think about yourself.
This doesn't mean be mean to the acts, it's just the acts are going to complain. All the food isn't good. The dressing room isn't that good. Oh, you took all my money. Now, you want to treat their fans well. That is something that pays dividends, but do not listen to their complaints. They're going to complain no matter what. They were just in a van for nine years with three guys they know from high school, they've been in hamburgers. They got to take it out on somebody. Don't bend over backwards for the acts.
Jeb Banner: One thing we're seeing with some of our customers is they're doing membership programs. They're really focused on building community around their venue and making it a social club, a place to go hang out and building a great passive revenue streams off of these monthly memberships and I'm just curious, are you seeing anything else else out there that's innovative in that way of being able to build that kind of reoccurring revenue?
Bob Lefsetz: The most innovative person is Shapiro and the Brooklyn Bulls. There's a lot of economic issues. You ultimately made a deal with Live Nation, but the original Brooklyn Bull in Brooklyn was based on the fact you could have parties there, you could have Bar Mitzvahs there. You could bring in the kids on Sunday. I've been to room a lot of rock clubs. A lot of them tend to be a room where the walls are painted black. They don't really... I see somebody has a question here. They don't really fit the bill for that.
As far as membership goes, if you're doing it to save your business, it's just one step before you're going to go out of business, like an independent bookstore. Because generally speaking, what are you giving for that membership? You've got to give them early presale to the shows. You have to know mean if you're selling out every show and you say, I'll let you buy a ticket early and if you're seated, which you probably are not, get a good, see, then people are going to join the club. If you see the club primarily as a revenue generator, you're going down the wrong angle.
It's got to be beneficial to the customer. The other thing you're saying, this is what a lot of government, philanthropic sites are doing. Do people want to come and see the talent you were presenting? Do not get hung up in that we're in the internet era and don't be innovative. Are they coming to see this talent? Are you booking talent that people want to come? If you are, then you can expand, but if you were not have a business based on people coming to see the talent, you're busy. Do not try to add all that stuff. It's never going to work.
Jeb Banner: Yep, yep. There's a question from Glenn Booth. Are these memberships all done at the venue level or are any promoters doing them? We've only seen at the venue level, but that's an interesting idea at the promoter level as well. Maybe someone out there has seen that as well. I don't know if you've seen that, Bob.
Bob Lefsetz: Well, Live Nation has tried different things with their sheds, but that's a different business model. That is based on advertising and food and beverage and they need to get a certain number of people in there. No one has figured it out. It's simple. If the act is hot, you have no problem selling a ticket And if the act is not hot, who cares about what the... There's a lot of things that have come and gone like gamification. That was really how that is passe.
There's a story in the WaPo today about how there's been all this backlash for the last month about how dating apps aren't working that well anymore and they did a story. It wasn't exhaustive, but they are nickel-and-diming. The customers where the customers are now rejected because they're nickel-and-diming and it doesn't really work and they're killing the business in the process.
If you were running a business like this today, you literally have to know who your customer is. You have to have a mailing list. You have a text. You have to have text because text cancels. You don't want anybody showing up at your venue. I know people who run arenas in foreign countries, they cancel the day of. No one shows up at the venue. The other thing is do not overdo it. You may listen to Scott Galloway, he mentioned this about a do-move. The original story was CB Now. Once you start sending and fundraising email every day you're on the way out. Yes. You want to make your customers aware. You want, you do. You do not want to email them or text them every day. People disconnect. They want to feel like it's advantageous to them. What was the next question?
Jeb Banner: There's actually got a couple of questions here, but I'd-
Bob Lefsetz: Okay, let me go through. Is the talent is good today as it was? This is a very interesting thing. All the good talent is on the club level, okay? Because the talent where the Spotify top 50, that's a studio creation. It's not built on the road. It is very hard to find these new acts, but all the excitement is on the smaller level.
Somebody asks, is Ticketmaster going to break up with Live Nation? Let's be clear, everybody's grandstanding here on this DC but you have to get, this is how Live Nation and Ticketmaster merged to begin with. It is the law. It's not emotion. Historically, antitrust law was you had to show that it hurt the customer. On that basis, I do not see a split up whatsoever because ticket prices will not go down if they're separated. However, Lina Khan, who's been in charge, very active in the Biden days, there's a new theory, which is if we break you up, it will foster competition.
You and me can debate all day long whether it would foster competition, but if they believe that it will, then they will break you up. So no one really knows. Rapinoe screwed himself because he promoted to all of his investors the flywheel that Ticketmaster makes money for Live Nation, which makes money for the venues, etc. etc. And that is true and that looks really bad once you also have to know anybody in the legal business. I am a lawyer having practice at EOPS. If you actually go to court, you have no idea what the result will be. Some people think that it will be split up before, but that's really going to hurt Live Nation. Let's be clear, the only people, independent promoters, if they break this up, especially AEG, it will be great for them. Customer, it's not really going to make any difference.
Jeb Banner: Well, on that real quick... Wait, hold on. Bob, what do you think? Do you think they should be split up?
Bob Lefsetz: I would say under the old rules, the old viewpoint prior to Lina Khan, they will win. I know that they're very uptight over there. It's not coming out till 2026. It's got a lot to do with the evidence. If you know there is a consent decree, it's very simple what they're saying. Are you leveraging Ticketmaster? If I don't sign up with Ticketmaster, am I not going to get asked? They found violations and therefore the consent decree became larger, extended.
I will not bet on this because too much is in the unknowns and there's been a change, but I will also say Lina Khan has not won in all these lawsuits there have been. But if we want to talk about consolidation, it is never going to go the other way. Happen to be a big, when you have a mature business, it consolidates. The most recent example of this, of course, is the internet. Now, we have a handful of companies control this. You remember 20, 25 years ago? There were a million companies. It is not going to be a million companies again, it is not going to.
The other thing about it is people in this business have been for a long time, they know if you sustained a loss, the act would give money back to promoter. Nobody gives money back to Live Nation. It's a public company. The whole ethos of the business has changed, but never forget this is a street entrepreneurial level. When you owning, when you're running a club, you are dealing with the most entrepreneurial people, new managers who are scrapping. You might have old managers who are very savvy. As far as agents, there are agents trying to make their bones, and these are the people you want to have a good relationship with. You are on the ground level of what's happening.
Jeb Banner: I want to ask you one more time, if you had a magic wand, would you break up a Live Nation and Ticketmaster? Do you think it would be better for the concert industry?
Bob Lefsetz: I believe they never should have been allowed to merge to begin with. Once again, this is an opinion as opposed to the law.
Jeb Banner: Right. I get it.
Bob Lefsetz: If they were to break up today, the average, no. You have on a club level, you can sell tickets independently. I hear all these ticket startups. If you go-
Bob Lefsetz: ... [inaudible 00:50:00] at startups, okay. If you go to the Taylor Swift thing, no one else can do it at this level. The margin is incredibly thin, so who's going to get into this business? No one is looking to make money, maybe Amazon is seeing it as an add-on. So we're not going to immediately see other people get in the business, and they're just going to shift the dollars around in the deal. Everybody's going to get the same amount of money, as far as, you know, at the very top levels, if you are competing for an act, Live Nation today will always pay more, assuming they [inaudible 00:50:40], because they have additional revenue streams.
[00:50:04]
Jeb Banner: Yeah, that's right.
Bob Lefsetz: They can go... So I am more excited about the unknown. This is the major labels, I see somebody going out here, but it used to be controlled marketplace. I remember, we're talking 50 years ago, there were 2,500 records a year, then there were 5,000 records a year. It was controlled by the six major label groups. The major labels are like today's movie studios. They're putting out fewer and fewer movies, and fewer and fewer records putting new resources in, trying to have success. That is not the modern paradigm. Today, the successes are [inaudible 00:51:19].
If you look at the Spotify statistics, the market share of the hit acts continues to go down. So if the labels, if they were smart, they would get all these acts who are doing less business to control the marketplace. They are seeding that marketplace. However, unlike tech, they have catalogs that get paid, whereas tech, it's literally, "What have you done for me lately?" I would not advise anybody get into the record business. I'd go on and on. That's a really risky business, but they are losing their control. If someone says, "As far as TikTok," the record labels are more un-savvy than they used to be. They have very few people working there. It's not like the old days. They have overpaid executives, been there forever, and worker bees. They want something to instantly succeed. They're not looking to sign something that they're going to put in your club. You are in a completely different business from them.
Jeb Banner: Got a good question from Jordan here at The Troubadour, "What do you think the answer is to cater to non-drinking crowd Gen Z, when it comes to the bar? I'm talking about outside of NA beer and THC drinks. For the complete non-Vice types of folks, something we are working through a lot as I see selling out is with the Gen Z crowd." I'm not sure I follow the last part of that.
Bob Lefsetz: I understand the question. I'm a firm believer in charge more. In that, if you go there... I was reading an article which was astounding. There's been 30% inflation since 1999, meaning if the ticket was $10, it's now $13. If it's $100, it's $130. So if people want to go to the show, if you are putting on live music and people want to go, they cannot get that experience anywhere else. And if you have to convince them, you're in trouble, okay? Food service, very risky. This is just like anything else. We see this all the time. "But, oh, we had to raise the price because our logistics prices went up."
I don't know how much you're doing a head in alcohol. Certainly, there's a business in non-alcoholic drinks. It's not incredibly significant, just charge more. People won't complain, but people complain all day long. We have an election right now, people are complaining about making ends meet. Experience is one of the places that people want to go first. I mean, I don't want to... Just blue-skying it. One of the advantages that clubs have is they played these acts early. If you go to any major venue, they have pictures of all the acts are there. If you played acts that went on to have big success, that's really good for your image. You know, put it there, put it in any ads, et cetera. I don't think this is night and day, but it's important.
Jeb Banner: So in terms of them making more money on the ticket, let's dip into fees a little bit here, because a lot of the ways venues currently stay above water is through the fees that they can add on through their ticketing provider that allows them to get their profit margin, because most of the ticket money is going to the artist. What's your take? I know there's a lot of pushback. We can talk about Fix The Tix as well, which is not quite... It's more about the secondary market, Fix The Tix, but what are your thoughts on ticket fees, particularly at the club level, where they're so critical to the health of that club? Do you think that there's more room here, or do you think that we're kind of maxing out what we can do?
Bob Lefsetz: Let's go to the other extreme before we get to the club, okay? Let's talk about Springsteen. Springsteen went on sale about a year ago, everybody bitched that tickets were like in excess of $100. He has a Boomer audience, a Gen X audience. They go to dinner before the show, it's in excess of $100 a person. But Springsteen, where they say, "I saw... You know, I'm entitled to a ticket." Charge what the act is worth, okay? We hear from the acts, "Oh, it's going to hurt their image." Doesn't hurt Formula 1, doesn't hurt sports, whatever. Why is music the only place we have to undercharge? And why should the venues let the acts get away with, "Oh, I had a $20 ticket, it's not my fault you're paying $45 at the door." It is $45. Otherwise, there's no show, okay?
Then, the venue becomes the enemy, and a lot of these venues, you are the only place in town, say, "$45 all in." We don't want the guy... The acts are unsophisticated to boot. They'll go on and they'll bitch about it. They don't even understand how the deal... I can name hustle [inaudible 00:56:17]. They don't know how the deal works. So the whole business is evolving this way, okay, because everyone, they call them garbage fees. They really aren't in the music business. Either you can white-knuckle it, or everybody has to agree, have to charge what the ticket's worth, because you're not ripping people off. That's what the ticket costs, and it's really scary on the high level.
Jeb Banner: What do you think, on that note, we see dynamic ticket pricing becoming more of a norm, particularly at the arena, large shed level. We don't see a lot of clubs embracing that yet. Do you think that's one of the ways these clubs can see better margins, is through embracing dynamic ticket pricing for these shows that have such high demand?
Bob Lefsetz: Okay, let's talk about the on sale for an act that's playing arenas across the country. Forget all the pre-sales. That's a different world, and there may be very few acts when the actual ticket's left on the sale. I know one of the two major... They both, one says, they do it, the other. They literally have people there who are adjusting the price on the fly. They're literally seeing demand and they're adjusting. I just went to see The Stones, they flex price. They have tickets available till minute before the show. Their grosses are also $15 million a night, $12 million a night, so what is the goal, okay?
So it's a funny thing with the secondary market. If you have a venue and you make it so all the tickets are really tied up, public's going to be pissed. There's a certain percentage of the market that wants to know if they'll pay $1,000, they can get in, but the fact that the secondary market has a few tickets, that is not a problem, okay? If you know the show is going to sell out, that's one... If the show's not going to sell out, the dynamic pricing thing is completely irrelevant. The other thing is a club has a reputation, an arena or a stadium does not. If you look like you're gouging, that's going to hurt you, in terms of your image. So if you know that you have a show that's going to sell out, first, I would experiment with what they do on the big level, the so-called what used to be called platinum. Now, they've changed the meaning a little bit, it's up close and personal.
Now, if you talk to the people who started at Irving Azoff and all those people, now, first it came with a laminate. You could hear the rehearsal, and you could maybe meet a band member, okay? He says, "Now, it's really just about good tickets." He says, "You cannot find one person who is dissatisfied." You look at the $1,000 ticket, you'd be stunned how many people do not have zillion dollar jobs. They are just that big a fan. If you have a really hot act and you want to charge $500 a ticket, go for it, and you got to get something for your $500. You got to be up close. Maybe you get some other thing, I'll let you dream that up, but this is the way it works at festivals, this is the way it works for arenas. If you know that you're going to do sell-out business, why should it be GA for everybody?
Let's be clear, you're going to have some guy who says, "I come to your club every week and I'm entitled..." Just go, "Yeah, yeah, yeah," and don't bend the rules, okay? But you cannot look like you're ripping them off. A lot of these clubs, you charge more on New Year's Eve. Use it as the exact same example. If you have a hot act, and view it as, "At this price, you know can get a ticket.
You don't have to sit there at 10:00 in the morning, whatever, blah, blah, blah," and then this is where it leads into membership. But in terms of flex pricing, in flex pricing, as I said with The Stones, the goal is not to be sold out until the show plays. A lot of people don't want to take that risk. If you're The Stones, and you're playing to 20,000, and for some reason you don't sell 1,000 tickets, you're fine. If you're a club and you don't sell 50 out of 250, you're losing money.
Jeb Banner: Yeah, that's right.
Bob Lefsetz: So a lot of this has nothing to do with music. It's about running a business, but you have to be very in touch with what you're selling. If you have a great venue, will that benefit you? Absolutely. But most all is who are you putting on stage? Period. And you have a reputation, so people are continuing to check out your venue. Do you want to create an image for your venue? Is this not necessary? But yes, put somebody on your digital marketing. Now, I hate digital marketing teams where they say, "Oh, yeah, we'll post on Twitter, we'll post on TikTok." Innovative stuff.
If you have a character for your venue and you want to have people believe it, there is something there and it will help you. It is a very small piece of the puzzle. You have a box. What is it going to take to fill that box? Now, once again, it may be difficult if you're opening 360 nights a year. There aren't 360 sell-outs in a year. So, but think about the talent and think about what it's going to motivate your marketplace to buy tickets. Everything else, especially at the club level, is way down the list.
Jeb Banner: I think, on this, we have a question. "What do you advise for independent venues, promoters who are competing with AEG and Live Nation?"
Bob Lefsetz: Don't.
Jeb Banner: "What kind of strategies..." Don't. "What kind of strategies-
Bob Lefsetz: No, I mean, listen-
Jeb Banner: "... reach our younger demographic?" Yeah.
Bob Lefsetz: They have deeper... Okay, I know these guys, they sold [inaudible 01:02:38]-
Jeb Banner: How do they not compete with AEG and Live Nation? In other words, how do they play their own game?
Bob Lefsetz: You find talent. You find talent they don't want to buy, or they don't have a venue in your market that they can play at. There's this guy, he changed the name. It was originally Square Peg Concerts. Now, it's called Emporium. Two guys, Dan Steinberg and Jason. They booked acts that no one else would book. They booked acapella acts. They booked the Trailer Park Boys out of Canada. There's a lot of acts out there, a lot of talent that's not even on the reader of these people, which is why Live Nation bought his company. If AEG... I mean, this is Peter Thiel, and I'm not in agreement with his politics, it's not revolutionary, go where everybody is not. Don't sit there and say, "I want to buy this act," and get in a bidding war with AEG. That's just a bad strategy. There's so many acts that are not on...
Live Nation's very centralized, so the odds of you finding something that's out of the purview of Live Nation are very high. AEG, the buyers on the ground are better, but AEG doesn't have a club in every market. They don't have this, and they got to fill that terrible club downtown now called De Novo or whatever. They changed the name again. It's a bad venue, but it's on their campus. They don't have to book all these venues like you do. There've been legendary clubs, okay, and we know the names. You want to be so successful that you're one of those legendary clubs. If you're not on that route, go into another business, and if you would rather watch football than read the statistics and get a feel for the business, you are going to lose. If this is a hobby, get out, okay?
In addition, I can't tell you how many people in this business took money who are very successful now, took money from investors and lost it all. This is a cutthroat business. If you're Apple, Apple's margins are in excess of 30%. The margins in Live Nation are less than 5%, so even if you're incredibly successful, you can only make so much money. So if your heart's desire is not to run a music club, you're not going to succeed, and passion about music is not enough. It's like the independent booksellers, same thing, not the identical business, you get the product everywhere. You have to be a good businessperson. If you are looking to have a better club experience, I would not blue-sky this. I would take business courses.
It's like, what's his name? When Polygram owned A&M, they sent their... Excuse me, the president of the company, Al, to the Harvard Business, Summer Business school. I was just on the phone with John Boyle. He worked at A&M. He managed acts like Exhibit, and, well, the other act [inaudible 01:05:51]. Things dried up, he went for an executive MBA at Berkeley, and then he ended up working at EDC and being involved, selling the company to Live Nation. It's like when on club level, business is much more important than... You have to be a passionate music fan to want to do it, but your passion about music is... This is business, you know?
The business is run up, so it's all consolidated now, but a lot of the old people are still around. You know, Arnie Granite, his old partner in Chicago, et cetera. If you know these people, they all have a very distinct personality, and most of them could not work for anybody else, and could not do anything else. And if you talk to them, once they had success, they bought theaters, they own restaurants. They are inherently entrepreneurial. I have never been with one of those guys where they basically sat and wanted to talk music for an hour. Never. They'll tell you stories all day long. Okay, it's about business.
Jeb Banner: I want to back up to something you said about building legendary clubs, and how important that is to be able to do underplays and to have an audience that turns up. And I want to marry that with the growing trend of tribute and cover bands that we're seeing across many venues. and how important a role they play in the viability of that venue to be able, to stay open enough days a week and sell enough tickets. Because a lot of times, those are good profit margins, and also good drinking crowds, to be able to do the bets on up and coming talent.
Do you have a take on that part of the club, and just concert industry in general, in terms of the role that tribute bands play? And I think as we think about how a lot of these legacy bands are signing off or are appearing to sign off, I think that the demand for that music, which seems not entirely cross-generational, but certainly beyond just the Boomer generation, right? Like, I love The Eagles and bands like that, even though I kind of came up a little bit later. I'm curious, your thoughts on the role they play in the industry with the clubs, and what kind of value they're creating or potentially destroying with the clubs that associate and book these artists?
Bob Lefsetz: You got a couple of things. First of all, a lot of the acts going out under the original moniker of tribute bands. I was talking to a friend of mine, [inaudible 01:08:37]-
Jeb Banner: Yeah, right, right. They have a drummer, whatever.
Bob Lefsetz: The other day, [inaudible 01:08:39] went to see Asia. There's no original members there. You go to see Foreigner, there's no original members. Most of the tribute acts have been doing it for a long time. I remember at [inaudible 01:08:52] one year, was it The Fab Faux, whatever. They came out, they put on the Sergeant Pepper outfit. If you want to book a tribute act, they can show you what kind of... Like, my friends in Lez Zeppelin, they can show you what kind of business they do. They've been doing it for years. I can't tell you how successful they'll be in your market, but this is not a new product. When it's an act, traditionally classic rock, that isn't extant anymore, [inaudible 01:09:20], Fleetwood Mac, it goes on and on, Led Zeppelin, I see no reason not to book them. I only see it as a good thing, I don't think it hurts business at all.
The problem is the reverse, getting people into your venue for unknown music. I went there to see The Stones, what, 10 days ago, I knew every song, okay? You want me to pay $40 for an act that I don't know a single song or only heard one song, or I could pay $30 or $25 to hear somebody do The Eagles kind of okay. Well, I'll go, I'll have a good time. You have to put your head in the mind of the consumer, and it was much easier in the days of terrestrial radio. You could create heat and bugs in your marketplace. Now, what you have to do is that all comes down to knowing who your customers are.
And this is very risky, but if you have good customers, just like if you go to a bar and you go there every week, every day, they give you a free drink, okay? You say, "Hey, next time, bring a friend for free." On that night, you know where they're not going to [inaudible 01:10:39]. It's like paper, all these big-ass paper shows, the key is just not to let the word get out.
Jeb Banner: Yep. I know we're past time, but I wanted-
Bob Lefsetz: I can talk a little bit further, if you want to?
Jeb Banner: Yeah, yeah, I'm loving the conversation. One of the things I've been thinking about a lot recently, it's partially through the eyes of my daughters, who are, as I said earlier, 18 to 23, I have three daughters, and just how eclectic their taste is, so much more collective than mine was. And there's a lot of historical data from the past that shows that people lock in their preferences when they graduate from high school or graduate from college. People kind of stop exploring new music, and they move with that group of artists through their lives, and they keep coming back to those artists.
I'm curious for what you think about these next generations coming up that are listening to, seriously, Glenn Miller, to the newest artists that are coming out through TikTok. How do you think that's going to play out as they come up into being more concert age, having income, going out to these shows? My daughter just went to a Beach Boys show, she's 18. Fascinating to me, to see them actively adopt a wider range. Do you think this generation will continue, because of the way Spotify is built, to be in a discovery mode as they get older? Do you think that they're going to do the same thing that the rest of us did or a lot of us did, getting stuck in the artists that we grew up with? And how might that play out in the concert industry?
Bob Lefsetz: I'll riff on your question, my basic answer is I don't know. We are in a very weird space. You never used to compete against the history of recorded music. On Spotify, it's not only the news stuff. People will send me something, I go, "That's okay, but not as good as Joni Mitchell, and Joni Mitchell is just a click away." That didn't use to be the case. Secondly, what role does music play in the marketplace? We have a political situation. I happen to be a liberal Democrat, but they lied about Joe Biden, okay, and we didn't know the truth. This is a business based on lies. Okay, a household name band kept on adding nights at a venue, to the point where they had a week of nights saying every one sold out. I know people bought tickets to flip them, and they couldn't flip them, because in reality, none of them shows were sold out, because there's tickets that are hard to sell, but music does not...
The reason I mentioned about bullshit, music does not represent the same thing it did in the '60s with The Beatles. People were alive, it was everything. '70s, it was great, it ran out of steam. Then, we had MTV, okay. I would love to tell you that to a lot of new music is as good as being on Instagram Reels or TikTok, but it is not. There's a lot of innovation there that is not in the music. So it's the same thing that people say, "I want to be on a playlist." The most active users on Spotify, which gives us the most statistics, in addition to being the biggest platform, people who are active listeners, they choose the songs. They never even listen to playlists. Playlists are the background music. So if someone listens to these different acts, does that mean they're passionate enough to buy a ticket? No.
Why will they buy a ticket? They're passionate, their friends are going, there's heat around the act. I mean, I live in LA, where there are a lot of famous people. I know people who couldn't leave their house. Now, they go to the supermarket, no one even bothers them. You have a period of fame. So do I think this business will continue to grow? Absolutely, by virtue of the fact, what I said earlier, we all have the same phone. I mean, I haven't had the latest phone, what, the iPhone 15 Pro Max? No one can tell it apart from the iPhone 15, 14. It's different, [inaudible 01:15:03]-
Bob Lefsetz: ... apart from the iPhone 15/14. It's different, but it used to be all these status items. We all have the same things, but you can go to a concert, or you can go on a trip, and you can have an experience that no one else has had, and you can brag about it. That is what we are selling. It is not identical to what was being sold in the old days. There are more acts than ever before, there are more venues, so there is demand. What does it take to get someone out of the house? Wow. Right this very second, I'm in Vail, Colorado. I am stunned how much live talent they have here. They have the Vilar Performing Arts Center, which. Of course, is underwritten, they have free music constantly, et cetera. It never used to be this way.
I lived in Salt Lake a long time, in years. There was never named talent coming through. Now everybody comes through all the time. There's more than ever before, so the competition is higher, but there is a demand. But the fact that people are consuming music. Think of all the acts that were big one, even in the last couple of years. People, they did good business. They can't sell a ticket anymore. Where you guys are, or women too, in the club business, that's where careers are built, and that's where the acts sustain. In the larger venues and the Spotify Top 50, that comes and goes.
So, where does it go going forward? There will always be a Top 40 business. Top 40 ruled in the '60s until underground FM Radio came along. Then we had Top 40 with MTV. The reason all the emphasis on the Top 40 is it's the only thing the media can understand, and the labels like to control it to the degree they can. It is completely unrepresentative of what is going on in the business. Or I remember New Yorker did a long story on ticketing, and I was talking to one of the people who runs one of these major companies. He says, "Tell me something I don't know." If you are reading in the newspaper something about your business and you don't already know it, it's like the Wall Street Journal last Friday had a front page story on country music. If you didn't know all that reading it, then man, you shouldn't be in this business because you should be hoovering up information all the time.
Your job is to know what will sell tickets. At a certain price, people will go to see the Beach Boys. The Beach Boys are all over Disney Radio. You have to be sophisticated. Kids grow up. They know those songs. There are other acts that have never been featured, Or it's like, this is a few years, I have been a fan of this act, Emitt Rhodes. He died recently.
[01:15:04]
Jeb Banner: He died recently.
Bob Lefsetz: I'm also a fan of Lee Michaels, had one big hit that was big, and I talk to people, an agent, "What do you think?" I know Lee, and he goes, "I couldn't get club buyers to buy it. I'm not sure you get people out." You're making calculations all day long. It's like Jeff Lynne. Jeff Lynne went out and did shitty. Even the biggest acts, they don't know. Look at the Black Keys. The Black Keys put up a show, put up a tour, and they had to bring it down. Black Keys were managed by Q Prime. John Peets, I knew very good, whatever. They switched to Full Stop. That show would've sold out the year before. The market changed. We consider all day long, well, the last album didn't do that. Well, people have disposable income. They wanted to go. So, these are the biggest people in the business, and they got it wrong. The only problem with running a club is you have to get it right more than wrong.
Jeb Banner: Yeah. Do you think that what's going on with J-Lo, Pearl Jam, Black Keys, are we just looking at a post-COVID bubble bursting there, where you had so much demand?
Bob Lefsetz: Absolutely.
Jeb Banner: Yeah. Right. I think we're seeing that, even at the club market, of just there is such an appetite for live music because of the two, three year period where there wasn't much going on. Do you think that this is going to be something where we kind of even back out again, or are we looking at more of a new normal of just sustained lower demand?
Bob Lefsetz: This is a new normal. There's so many other things. Most of these acts go out during the summer. Do the name acts go out this summer, or do they not go? In your marketplace, did the festival take all the money out of the marketplace by being in May and taking all these things? There's a lot of raw business stuff. The explosion after COVID is done. Does that mean we will never reach these heights again? No, we could, but it doesn't look this way. The other thing is, Ahmet Ertegun, when he ran Atlantic records, ultimately owned by Warner, and they were running it with spreadsheets, the guy. And the guy who was running it went to Ahmet, "What do you plan to do next year?" And he goes, "To increase the numbers."
"We're going to have more hits." These people didn't understand the business. An act could come along and revolutionize the business overnight. Happened again and again, Nirvana, Taylor Swift, okay, Alanis Morissette. We don't know if an act is going to come tomorrow, but the story of the summer is Sabrina Carpenter. That is not what I'm talking about. That's hit-based. She has a history in child TV. I'm not a fan of Eddie Vedder, but the image is, he will say no. Most of these hit acts will say yes, or you have Bob Dylan who would rather tell a lie than the truth. Makes his documentaries, they're filled with lies. So somebody charismatic. Just to go one step further, Neil Young is on a tour this summer. The previous summer, he was going to do a tour with electric buses. The technology wasn't there, so we did a West Coast tour.
I went to the show, underplay, really expensive. Needless to say, I didn't pay/ This year, until he got ill, he was on a shed tour. I have a friend who went in Connecticut where I grew up complaining about the ticket price. He went. When's the next time Neil Young is going to play that market? He's smart. He knows what's going on. What, he's got to worry about these fans? It's just you have to know who you are. Some of these bands without new members can do incredible business. Some can do shittily. I just want to go through a couple of these questions.
Jeb Banner: Yeah, knock them out. Go for it.
Bob Lefsetz: The English market, the English market is completely different. It's a smaller country. People follow the music business like horse racing. They have a Christmas single, they have a summer thing going with an unknown act. As far as going over there to make it, yes, it's a smaller market, you're exotic, but let's be very clear. How fucking good are you? If you are really great and you might want to try to control market, Tom Petty went there, a lot of people there, but it's no ultimately panacea.
What do I think of all the music apps saying they're going to help music artists? I hate those fucking people. They're taking money from people, usually the wannabes, all these things. Reverb Nation, it goes on and on. There's a business telling people what they want to hear. I said earlier, with Spotify, they wouldn't launch in America till they had all services. You do not want to put a wall up between you and anything these days because the hardest thing is to get someone to pay attention. If they're paying attention, there's a million ways to monetize. I used to charge for my newsletter. Once I made it free, at this point, turn of the century, I made much more money because people all over the world. I have friends that go, "Oh, go on Substack. You can charge." No, that's not my goal. I don't want to limit the audience. So these apps, these are just people either bitching that the world has changed or trying to prey on the world.
TikTok is not real talent. That is not true. If you are in the music business and you are not spending time on TikTok and Instagram Reels, the joke is on you. That is the heartbeat of America. That's where it's really going on. The talent people are selling in TikTok is usually different, non-musical. How much of the music talent on TikTok will translate to having real career? Very, very little, but if you want to see innovation, that's where you're going to see.
What do I, prediction for the... Well, Jeff Lieberman says, "My mentor was Russ Regan and Tom Noonan." Of course, Russ Regan ran MCA. Tom Noonan was a great guy. He ran the Billboard charts. Prior to SoundScan, he literally made up the chart himself. And when SoundScan came along, it was a revolution because instead of working your way up, you entered at number one and then came down.
Let me see if there's anything else. What do I think of the talent on TikTok? The labels respond. Labels are looking for insurance. That is not the way to do it. They don't develop talent. I don't want to harp on this thing about artist development. And if you talk to a label, they think artist development is to do one album from zero to 100. No, it's about doing things over years. They're not in it for a long time, but the acts who play your venues are.
What do I see as the biggest challenge live music faces today? The people who make it. In the heyday, middle-class, people made the music. In some of the smaller genres, that's still the case, but it's so hard to make a living that you get a lot of people... When Survivor launched in 2000, those people thought they were going to be worldwide stars. Then you had the beach house with MTV Jersey, Shore. Those people know, "I'm going to be on TV for six months and I'm going back to Poughkeepsie." You need people who can say no, and I wish we had more middle-class people as opposed to... People who go to Ivy League colleges, they want to go work at the bank, and Jerry Harrison of Talking Heads went to Harvard. I can't tell you another guy who's a big star out of Harvard right now.
Let me see here.
Jeb Banner: I got a question for you here.
Bob Lefsetz: Okay.
Jeb Banner: Performing rights organizations, had a question come in before the webinar on this. With blockchain technology and other tech solutions, still early stage, but a lot of clubs really struggle with what they see is the layering of additional PROs. Obviously you have ASCAP and BMI, but it feels like there's got to be a better way for the system to work. It's an important revenue stream for artists, at least it can be. Is there any thoughts on what a modern version of that might look like that would be less of a burden?
Bob Lefsetz: This is something that's controlled at the federal level, at the highest level. They're talking about retroactive payments for some of these large promoters, and that is incredibly big. The other thing that's challenged for 20 years is a database with all the rights holders on the songs. People still haven't done that, generally speaking because there's not enough money in doing it. But if the government is involved, I think the independent smaller venues are being involved and it's a very big issue, but it's not a battle they should be fighting themselves. They should line up with every promoter. This is one thing we have in common, the AEGs, et cetera, because you all want to have deals that are fair.
Jeb Banner: I know we got to wrap up here. A couple of quick questions here. Do you have any new emerging artists? I heard you say this recently. Like in 50 years, no one's going to remember. Most anybody who's around right now. That's the nature of things, and it's been interesting to see the staying power of the Beatles and some of those acts as well. Anybody you're tracking right now that you think in the last 10 years has come up that has the ability to have that kind of staying power, to be around, to be relevant in 50 years like the Beatles have been?
Bob Lefsetz: Okay, I could talk about unknown acts, but I'm not sure those acts are going to go any further. This is like talking politics. If you want your act to last, have melody in the songs, have hooky choruses and have a vocalist who can sing. People forget this with the Beatles. They had pre-choruses in their songs. They had bridges. They could all sing. They were even good-looking. And I get this from people all the time.
People see me, "What do you think of my music?" I don't respond to anybody I don't know or isn't a known name in the business because 10% of the public is literally insane. You don't know which 10% of it is, but when I used to respond, people don't want the truth. They just don't want to hear it. I don't care anybody. They don't, and you say, "Well, he wasn't that great." And I said, "The vocals aren't that great," and he said, "Well, what about the lyrics? The lyrics were..." They said, "What about Bob Dylan?" I said, "Yeah, but Bob Dylan was the greatest lyricist of all time."
So the concept of adding these things all together, let's stay with Taylor Swift. The initial albums were co-written, the songs were co-written with this woman, Liz Rose. Then she did it herself. Those songs were nowhere near as good. Now she works with the biggest hit makers, Max Martin. I know those guys. Those guys are geniuses. It doesn't have much to do with her, and the songs became more stupid. If you want to last, you have to have those basic elements, but the people in the business...
You have to go back to The Police. Father was in the CIA. Police were successful. They decided to tour around the world. People act still have that mentality. I am going to be rich and famous. Everybody's going to know my... That is more important than the music. On the other hand, I can't tell you how many acts I know, the guys wear engineer boots. The problem is their music sucks. So if you came out today, what's his name? Eric Carmen of the Raspberries recently died, and it took me a long time to become a fan of the Raspberries, but in the '70s, they created songs like the '60s. The songs went to number one because there were good songs you could sing. Please go all the way.
The best song for me of the 21st century is Gnarls Barkley's Crazy. I hadn't heard anything that sounded exactly like that. The other thing is people talk. Do not let anyone tell you that anybody today, the kids today have short attention spans. That is complete. Do not buy that. They have incredible shit detectors. There's so much that they go, "Next. Next. Next." These are the same people, stay up all night watching Friends reruns. It has to be great to continue to go with it.
I've looked, reading these things, but okay.
Jeb Banner: Yep. I think we're reaching the end here. This has been a fantastic-
Bob Lefsetz: I think we are.
Jeb Banner: Yeah, I think really enjoyed this conversation, Bob. Appreciate you making the time and hanging out a little bit longer.
Bob Lefsetz: I guess I just want to wrap it up. Okay?
Jeb Banner: Yeah, please wrap it up.
Bob Lefsetz: The only thing better than hearing a great song is sex. Nothing is ever on the level of sex. That does not mean every song is on the level of sex. We all know that, and if that means you need to be in this business, you have to find your place in the business. The definitive song was written by AC/DC, It's a Long Way to the Top If You Want to Rock and Roll. Will music have the same place in society as it did in the '60s, '70s, and the '80s? There's not going to be another '80s. We've waited forever. But as I say, Alanis Morissette, she could never replicate that first album. That was unbelievable. So there will be stuff, and the reason we're all here today is we believe that there will be something.
Just talking about The Stones, okay, Mick Jagger, he's trying to act young, whatever, not that he's not... Keith Richard looks like he's an inch away from death. He is hair is white, bald on the top. He there smiles with his fake teeth and is playing guitar. This is it. We know it when we see it. That doesn't mean...
Okay, Reagan got shot. I'll tell two stories and then I'm going to go. Reagan got shot, and they delayed the Academy Award for one night. I had tickets to the second night to see Prince at Flipper's Roller Disco, which is now a drug store. It was torn down and rebuilt. This is at La Cienega and Santa Monica Boulevard.
Jeb Banner: What year was this?
Bob Lefsetz: This is 1981.
Jeb Banner: Okay. Early.
Bob Lefsetz: I went to see Prince on the Dirty Mind tour. He did the complete tour. He's jumping on the bed, et cetera. It was like something I'd never seen before. How many people were in the audience? Fewer than 50, 25, 30.
My friend Richard Griffiths had a long history in publishing and labels, became a manager, managed One Direction, Niall Horan, and a lot of other people. He was an agent. This is deep history, but you'll understand it. There was this guitarist in the band, Free, Paul Kossoff. If you talk to Paul Rogers, he says he's the best guitarist he ever worked with, and it was a double album called Free, Molten Gold. You can check out. He legendarily was flying for a gig in the UK when he died on the plane.
The opening act was AC/DC. My friend Richard Griffiths booked the act. It was in a club. AC/DC said, "We're going to play anyway." They play, fewer than 10 people. They did the complete thing. They carried Angus around the venue on the shoulders of... As soon as the show was done, the fewer than 10 people ran out of the venue. My friend was freaking out. It was that bad? The second show was packed. This is pre-cell phone. They had to go tell people, "You are not going to believe what I saw." He got fired anyway, but that's what this business is, and especially in a club.
If you go to an arena show, generally speaking, you're getting the same show they're playing in every market. You go to a club show. It's not about production. It's about the thing. People who go could say, "I saw the band there, and not only did I see them before you even knew who they were, they were unique. I was there." That's the essence of a club. I went to the Bottom Line to see Bruce Springsteen the year before Born to Run, and he debuted Jungleland. I'm telling you now. I went to see Bruce Springsteen. I have stories like that. They almost always happened in a club. I could tell you one story after another at the Troubadour, at the whiskey. That's what you're selling.
Okay, I think we covered it. Great talking to you.
Jeb Banner: Hey, Bob, thank you so much. When I hear you're talking about this, it's like to me, you're talking about experiences, and that really visceral experience of having that intimacy with the artist, and that's what these clubs exist to do. I think you've just unpacked a lot of great knowledge today and a lot of great ideas, and grateful that you can make the time. I'm sure everybody here is grateful to be able to chat. So thank you again, and enjoy Colorado, and hope to connect with you again soon here.
Bob Lefsetz: Okay, see you later.
Jeb Banner: Thank you. Bye.
