What They'll Never Tell You About the Music Business

by Peter M Thall

  My favorite pyrotechnic device is the remote fire pickle, which is just a variation on a television remote—and which doesn’t really look like a pickle. Luna Tech, Inc., located in Alabama, is probably the top supplier of pyrotechnics for performing acts. Here are some of their instructions for use of the remote fire pickle:

  There are two buttons located on the pickle and both must be pressed simultaneously to fire. This provides an extra margin of safety, in the event the pickle is dropped or knocked out of the operator’s hand. The pickle has a red LED to indicate the SAFE/ARM status of the Master….It is recommended that no more than five feet of cable be used to ensure that the Master is within sight of the operator.

  Sounds like fun. Anyway, here are some of the things groups need to consider when planning the pyrotechnics part of their shows.

  Costs In addition to being hazardous, these effects are not inexpensive. A full-effects show at an arena venue can cost upward of $5,000 per show. In addition to the equipment and personnel supplied by the pyrotechnics company, some states require a locally licensed “shooter” to be present—one more body to travel, accommodate, feed, insure, and pay.

  Safety Issues Some of the pyrotechnics-related equipment used in a performance can endanger the safety of all personnel and customers at the venue. A recent notice from the principal pyrotechnics supplier to all artist productions that use its pyrotechnics services warned that certain “IR-controlled video projectors can result in premature firing” of explosives (benignly referred to as “effects”). Testing effects ahead of time can help, but given current advances in electronics, and remote digital equipment, ranging from sound and lights to laser and pyrotechnics, it was only a matter of time before there was a major tragedy resulting from an erroneous signal initiated innocently or from some other mistake.

  Sure enough, on February 20, 2003, the ultimate showstopper occurred. Fire, caused by carelessly placed pyrotechnics, killed some one hundred people during a Great White concert at the Station Club in Rhode Island. Among the legal consequences? Milliondollar fines, lawsuits galore, bankruptcy, even jail for one hundred to two hundred counts of involuntary manslaughter (maximum sentence ten years). It was the fourth deadliest nightclub fire in US history. People, not just limited liability corporations, paid.

  Following this tragedy, the National Institute of Standards and Technology (NIST) (bet you’ve never heard of them), a division of the Commerce Department that, among other very obscure functions, sets the official clock in the United States, suggested a number of recommendations for venues involved in conduct that could lead to flammable results. In a report issued in June 2005, NIST recommended to all state and local governments national model building and fire codes for venues operating as new nightclubs or existing nightclubs holding at least one hundred people. Among NIST’s recommendations are the installation of sprinkler systems, restrictions on the use of flammable materials, and improved means of egress and signs. It also recommended that sufficient fire inspectors and building plan inspectors be on staff to fulfill these responsibilities. The report also addressed pyrotechnics specifically:

  Recommendation 4 calls for the NFPA 1126 standard [referring to the National Fire Protection Association] on the use of pyrotechnics before an audience to be strengthened by addressing the need for automatic sprinkler systems; minimum occupancy/building size levels; the posting of pyrotechnic use plans and emergency procedures; and setting new minimum clearances between pyrotechnics and the items they potentially could ignite.

  Whatever pyrotechnic effects you are planning to use, dealing with a reputable pyrotechnics company has obvious advantages. Among them is the likelihood that when pyrotechnics equipment is aged or stressed through use, the company providing the services will ensure that either new equipment compatible with the old is provided or that the old or damaged equipment is refurbished properly, expertly, and safely. Whether you are buying or renting a car, a jet plane, or a pyrotechnics stage display, it is always wise to ask about its age, in whose hands it has been, how many “miles” it has been driven, and where it has been used. Among the pieces of equipment that your production manager should be sure to examine are the cables that connect the active parts. Most of these pyrotechnic effects come with complicated diagrams of the firing connections. A typical diagram showing how to hook up a flame projector looks like it belongs in a World War II film about blowing up a bridge. This work is, in a word, scary—and as incredible as the effects are, fortunately the steps taken, and instructions provided, to ensure the safety of the personnel and the concertgoers are usually equal to the task.

  For example, the PYROPAK Grid Rocket is a tube device attached to a steel cable stretched between two points designed to be fired to simulate a rocket-propelled projectile. The Grid Rocket burns approximately three seconds, which translates to approximately 120 feet (36.5 meters) of level “flight.” This effect is so powerful, and the rocket covers so much ground, that special precautions must be taken to prevent the effect from burning the material around it. According to Luna Tech’s instructions:

  A minimum vertical Safety Clearance of 20 feet (6 meters) is required between the Grid Rocket and any people or flame sensitive materials. This is, of course, subject to any applicable local regulations. As always, when using any pyrotechnic effect outdoors, be sure to calculate the possible effects of wind on your Safety Clearances. Always test-fire your system before the performance.

  Most pyrotechnic effects are designed to work with certain equipment only. Start to extemporize and you’re asking for trouble.

  Other Preventable Tragedies

  From the Rolling Stones debacle at the Altamont (two killed) in 1969 to The Who disaster in Cincinnati in 1979 (eleven died), crowd control and security have been taken more seriously. In the former, members of Hell’s Angels, untutored in law enforcement, and the restraints of force, took matters of discipline in their own hands and two concertgoers died. In the latter, carefully laid plans to ensure the safe exit of concertgoers in the event of fire neglected to include protection against a surge of people rushing into the venue—Riverfront Coliseum—when the undesignated “festival seating” construct resulted in an uncontrolled mass of eight thousand people pushing their way into the venue seeking a better location to watch the band during a late sound check—because they thought that the concert had already begun. Unfortunately, lessons were not always learned from these tragedies. From mosh pits to soccer crowds, there remain many dangers to concert and sports watchers throughout the world (for example, the 2000 Pearl Jam concert in Roskilde, Denmark, during which nine died). The music goes on, but not always the lives of the attendees.

  Local Licenses and Permits

  Needless to say, numerous local licenses and permits will be required, and all competent tour managers/production managers know that. Here is another in the long line of reasons for hiring only experienced personnel—from personal manager to attorney to business manager (who, more than anyone else, will know all of the details of such regulations because the business manager is the one who writes the checks) to, of course, all touring staff members.

  Where Did You Say My Fireworks Were?

  UPS, FedEx, Airborne Express, RPS, and Viking all provide Internet facilities to track the shipment of goods, and you can find out literally within seconds exactly where your shipment is. This is particularly useful when your shipment contains hazardous materials, which, if in the wrong hands, could present more than a few problems.

  ELEMENTS OF TOURING AGREEMENTS: COMMONALITIES AND IDIOSYNCRASIES

  All agreements written to cover elements of tours are related to each other in many ways even though the subject of one is to move equipment, another to move and accommodate people, a third to provide the equipment that is transported, etc. Some elements are common to almost all of them: the need for an equipment manifest; language stating that all technicians work at the direction of the artist’s production team; language that makes it clear that payment
s due to the lessors of the equipment are “lease payments,” or “rents,” not simply “payments,” which might be interpreted to connote a sale; the right to terminate the agreement on short notice. Others, such as clauses related to equipment provided by specialty vendors and clauses related to liquidated damages, are not as common.

  The Equipment Manifest

  Neither the trucking company nor the airplane lessor will agree to transport the equipment unless and until certain information regarding the size, content, dimensions, and other details, of the equipment is provided. They will need materials and parts to secure the equipment during transportation, and they want as much information and notice as possible to ensure that they can transport the equipment safely and securely. Before they will transport anything, an equipment manifest, spelling all these things out, must be drawn up, approved by the business management, the personal manager, and the technical staff of the artist, and given to the company responsible for transporting the equipment. The sooner the equipment manifest is finalized, the better.

  Termination Clauses

  The artist must have the right to terminate all or many of the touring agreements on short notice in the event the tour is not succeeding or selling tickets. There is nothing worse for an artist financially, and emotionally, than to have to cancel a tour for lack of interest and at the same time have to pay the megacosts of the tour just as if the tour had proceeded on schedule.

  Back to Basics: Counting Seats

  Some promoters and venues play a special game. While they are more than happy to acknowledge the sale of tickets for the number of seats they have put up for sale, sometimes they also have “unmanifested” seats at the venues. There is no accounting for these seats, whether they are sold or not. After all, they do not really exist on paper, on websites, or in venue promotional literature. They only exist in front of the eyes of those who know their venues like they know their checkbooks. These unrecorded seats can number as many as two or three hundred. At $100 a seat, that reflects income of from $20,000 to $30,000—per night! At $250 (after all, these are often the prime seats—on stage, for example), we’re talking about $50,000 to $75,000. Have you ever seen a permanent seating chart for a rock or pop venue? You think you have, but you haven’t. Seating plans are as fluid as the weather in an outdoor stadium in New England. An artist’s tour manager must be charged with the responsibility of counting seats—as mundane as it may seem. Lots of money is involved. Further, in owner-operated venues, suites that are rented by the owner-operators at a premium to season ticket holders or sponsors—even scalpers—are not included in the calculation of the artist’s share of earnings. They are not considered “seats.”

  Specialty Vendors

  Given the sensitivity of some of the equipment, some companies require a special kind of truck to transport it, for example, an “air-ride” trailer. And, believe it or not, some of these companies insist that their equipment ride “in the nose” of the trailer. This may seem a bit technical to you, and it certainly is to me, but I am mentioning it because these companies are putting incredible value into the hands of the artist and the artist’s staff. Whether or not the artist’s staff in fact has the right kind of experience to handle the specialty equipment, the leasing companies have nothing to do with the choice of the touring staff and their insistence on some kind of control over how the equipment is handled and transported should not surprise the artist’s team.

  Liquidated Damages

  Liquidated damages (that is, an amount of money agreed in advance of a problem) in favor of the artist are more easily negotiated in sound and light agreements than in trucking and busing agreements. A smart equipment vendor will negotiate a fixed sum of money to be paid if for any reason the vendor is in material breach of the agreement. This is customarily established as daily fees for each day of a scheduled performance that is missed and a similar amount for each day for which the artist must find a substitute vendor.

  Owners and Operators: Who Nets the Net?

  The traditional model of the concert business is the net deal. The artist receives a guarantee against a percentage of the net—typically 85%. Any marquee headline attraction will try to get this deal. Another common model provides the artist with a percentage of gross—typically 60%. Both of these structures are known as the “four-wall” model because essentially the promoters rent the venue—the four walls—empty, and take care of the rest themselves. Of course, the rental cost includes the essential features of the venue such as ushers, some security, etc.

  But the four-wall archetype has become archaic because so many venues—particularly amphitheaters and even some arenas—are now owner operated. In such buildings, the standard 60% or 85% models can be bettered. The risk is substantially lower to owner-operators because there is a whole litany of ancillary income streams available to them such as parking fees, concession profits, a piece of the income derived from merchandise sold by the artist, and the insidious facility maintenance fee. Much of the income generated by these “add-ons” supplements the ticket price—did you wonder why they have gone so high? (One oddity of this paradigm is that the parking fee is collected per ticket, not per vehicle. For 20,000 tickets, at $3.00 a ticket, that’s $60,000. A recent hard-rock all-day festival added $13.50 to each $60 ticket. None of this went to the artist or the promoter. Talk about an add-on!)

  As noted, the artist does not usually share in add-on income. Accordingly, there is an upward pressure on the owner-operators by artists and their promoters to increase the standard model percentages. Remember, the owner-operators are not paying rent. While they may be contributing their receipts to service their debt on their buildings, they are nevertheless, in essence, renting out their own homes. Note that with municipal facilities such as Madison Square Garden or the Staples Center most of the money generated by a performance is still accounted for within the 60/40 gross or 85/15 net calculation. It is when so much income is “outside” of the deal that booking agents on behalf of their artist rosters try to squeeze even more out of the gross, or net, reflected by the portion of receipts that they can claim a percentage of.

  As of this writing, upward of 80% of the country’s amphitheaters are owned and operated by a huge concert promotion organization called Clear Channel, which has absorbed most of the independent promoters in the country. The remaining 15% to 20% are controlled by House of Blues concerts.

  Holograms: The Tour Never Ends

  Holograms (virtual images of dead artists) are the new rage. Whether an artist can legally replicate Elvis Presley dancing on stage with a live artist is questionable. But estates of deceased artists are not reluctant to glean money from the touring font of the 21st century. When Elvis was performing, ticket prices seldom reached $10. The multi-millions earned nowadays on the road is a vein of gold just waiting to be mined. Thus, estates of deceased artists are working out terms with performing acts and their promoters to “participate” in the live shows and in the revenues derived from them. With the permission of the representatives of the deceased artist, one need not get to the issue of infringing name and likeness rights, the so-called civil rights of the deceased (which may actually not exist at all in the United States absent state laws to the contrary, such as those in Tennessee and Indiana—the Supreme Court has not ruled on the issue). Their permission is eminently exchangeable for cash.

  Product or Service Sponsorship/Identification

  One way to promote your brand is to become identified with a product that reaches millions of whom comprise (or you wish to comprise) your core audience. Product sponsorship has become quite routine in recent years, and there are numerous companies which specialize in developing sponsorship relationships for artists. While the whole area of sponsorship is a bit outside of the subject of this chapter, let me make this one observation as to what needs to be considered: your exposure, which heretofore had been limited to a known audience, will expand and reach a far a greater audience of people who will not have the
same sympathies for you. For example, Markey Mark’s relationship with Calvin Klein famously ended in embarrassment over a bigoted remark attributed to him. Some feel that his replacement was simply a change whose time had come, but we will never know if it was really his “morals clause” (see chapter 7, this page) that ended his relationship with the apparel manufacturer. Similarly, the front man of Blood Sweat & Tears, a Canadian, had been involved in a minor marijuana problem in Canada and the US State Department offered to turn the other cheek if the band would perform in Eastern Europe on a State Department initiative. They did, and lost the entire right profile of their audience. So they decided to recapture it by playing Las Vegas. They did, and lost the entire left profile of their audience. Seller beware!

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  One final thought about the sharing of grand tour money. In the merchandising area, it used to be that the venue would either simply make room at no charge for the artist’s merchandise to be sold, or would provide booths and sometimes staff, in return for a small percentage of the merchandise income—routinely 3% to 10%. Those days are over. Now the venues charge as much as 40% of the merchandise income in return for permitting the merchandise to be sold in their halls. This is the main reason why the price of T-shirts has risen from $10 to $30 and why the cost of other tour merchandise is similarly high.