InvestorsHub Logo
Followers 84
Posts 32292
Boards Moderated 85
Alias Born 03/22/2005

Re: None

Monday, 07/03/2023 11:04:05 PM

Monday, July 03, 2023 11:04:05 PM

Post# of 108
>>> A Pop-Up Concert Company Gives Bands a Place to Perform, and 70% of the Profit

Sofar Sounds rides out the industry’s tough times with shows for fledgling acts.


By Alice Kantor

July 3, 2023

In a white-brick mansion in the north London neighborhood of Hampstead, about 50 people sit on the floor of a high-ceilinged living room. Just past 8 p.m., the four-piece band fronted by Irish singer-songwriter Lisa Canny steps onto a makeshift stage. As Canny picks up her harp and launches into a 25-minute set, attendees sip booze they brought to the event. Most of those in the audience, who paid £25 ($32) each for the show, are hearing her for the first time—and no one knew she’d be playing tonight.

What’s brought everyone together is Sofar Sounds, a London company that organizes pop-up concerts featuring budding musicians in intimate venues. Tickets top out at about $30, the location is announced just one day in advance, and artists’ names are kept secret until they walk onstage.

Launched in 2009 in founder Rafe Offer’s living room, Sofar—the name stands for “Sounds from a Room”—has organized thousands of events in 78 countries, though it’s largely focused on the US, the UK and Australia. And some of its acts have gone on to stardom (in 2016, Billie Eilish played a Sofar gig in Los Angeles) or are already there (the following year, Ed Sheeran did one in Washington, DC).

The pandemic lockdowns devastated the indie music scene, and it’s being further buffeted by skyrocketing prices. As the cost of touring rises, bands are more frequently canceling concerts, and venues are shutting down at a record pace. Few people directly support new artists, typically sticking with acts they know. And algorithm-driven platforms such as Spotify reinforce these trends, steering listeners toward favorite tunes. “It’s hard for small artists to get noticed,” says Martin Ljungdahl Eriksson, a strategist at researcher Kantar Group. “Only a small number generate good revenue in today’s music environment.”

Sofar is bucking those trends—though no one will get rich from Sofar alone, which pays $100 to $150 for a 25-minute set. The company says about 70% of the profit from a show goes to its artists, with Sofar pocketing the rest. Rather than replacing small venues, the idea is to create a “global grassroots community” of performers and fans, says Jim Lucchese, Sofar’s chief executive officer. A musician himself, Lucchese recalls a spot he used to play in Boston that was turned into condos. “Cities are becoming more hostile to businesses that promote local artists,” he says. “We want to support this network.”

The company, which has 117 full-time employees, is planning 10,000 concerts this year, up from 6,000 in 2022. Early backers include Octopus Ventures and Virgin Group, which invested $6 million in 2016. Three years later, the company raised an additional $25 million from Battery Ventures and Union Square Ventures, giving Sofar an implied valuation of $99 million in 2021, according to researcher Tracxn.

At first, Sofar relied on word-of-mouth and volunteer staffers, holding shows in the homes of friends and supporters. Tickets were free, with the artists passing a hat during the performance. That model sparked criticism that Sofar was paying artists more in exposure than money. In 2019 the company reached a $460,000 settlement with the New York Department of Labor for asking unpaid volunteers to work full time organizing events. Sofar says it has amended its ways, with salaried employees and more shows in commercial or charity spaces.

New York music writer Liz Pelly questions how much has changed, saying that relying on Sofar to foster a local music scene is like expecting Airbnb to enrich a neighborhood. The platform doesn’t facilitate lasting connections between artists and listeners, who she says often struggle to remember the name of the bands they’ve just seen but are unlikely to forget that Sofar organized the show. “Is Sofar a success for local artists?” Pelly asks. “That’s still up for debate.”

Michael Kwatia, a 29-year-old musician in London whose stage name is Moak, has played about 20 Sofar shows. While he makes more at corporate events, the singer-songwriter prefers Sofar audiences, who are “very attentive, very quiet,” he says. “It’s also a group of people that would never have heard of me if not for this.”

Sofar didn’t invent the home concert or the “blind date” performance, but the company does help up-and-coming artists such as Moak find an audience, says Sybil Bell, founder of Independent Venue Week, a group that organizes an annual series of US and UK shows. Although Bell declined an offer from Sofar to cooperate on events, she says she appreciates the company’s efforts to expand access to live music—and perhaps spark interest in shows at more established venues in need of support. Sofar “provides a space for people to enjoy the arts,” she says. “Considering today’s financial pressures on the independent music industry, that’s a big deal.”



Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.