July 05

The Event Space Rental with Cash Bar vs. The $5 Cover

It’s a thought that has popped up in a lot of musicians’ minds – it came back up again a few months ago, when there was a rumor that a new bar in Williamsburg, Black Bear Bar, was only charging a $5 cover to see musicians play.  I don’t remember who I had first heard the rumor from, but if it was true, I was going to go – because most of the bars in Williamsburg and New York City in general charge an $8-10 cover charge to see music acts play.  It turns out that this was never to be – or if it ever was, it was never to be for long.  Because as soon as I showed up, it was an $8 cover, and at that point, I wasn’t sure if I wanted to pay.  The distinction between $5 and $8-10 isn’t that much in some sense.  Most New York City socialites make enough money that the difference isn’t going to prohibitive to them.  Nevertheless there is a good argument for making the price lower – and a good argument for making the price $5.

The $5 argument goes something like this:

  1. Generally speaking, you can get an EP’s worth of music for about $5 – where the EP will include anywhere from 4-7 tracks.  Generally speaking, a band will not play more than 6-7 songs in a set.  The cover charge for hearing a band play a local show with an EP’s worth of material shouldn’t be more than the price that the band would charge for the EP.  This is my suggested rule of thumb.
  2. As far as the bar is concerned, people who pay less for the cover are more likely to pay more money for a drink once they get inside – so the actual loss incurred by the bar by shifting to the $5 price is lessened.  People are also less likely to try to get in through the guest list if it’s a price that they don’t mind paying – and the psychological difference between $5 and $8 is significant.
  3. $5 is also just a nice even price to pay, and that counts.

There is, however another argument for lowering prices at local NYC venues:

We’ll call this the “event space rental with cash bar” phenomenon.  What is an event space rental with cash bar?  It’s basically the economic setup whereby a business rents out its space for a price, and the business additionally sets up a cash bar, which it makes extra money on, by way of the patrons who buy drinks at the event.  It’s the typical setup you’ll find at a hotel, but you’ll also find it at other sorts of establishments, including at some non-music bars – its a good way to set up a birthday party, or a celebratory event where you want to only bring in a certain limited number of guests together to celebrate something in private.  Chuck E. Cheese does the same thing, I think, except without the cash bar part, of course.

As it happens though, many music venues in New York City run as event spaces with cash bars.  The only difference is that instead of charging the host (band) the cost of the rental space, the bar makes up the cost of the rental space by directly charging the entrants – where the entrants are rounded up by the host.  Aside from that, the New York City music venue, and the event space rental with a cash bar are essentially the same.  The cost (at $8-10) effectively enforces the privacy of the event, preventing a walk-in crowd from even attempting to listen to the host band play.  And, of course, in both cases, the New York City music venue and event space both run a cash bar.

What would make the New York City music venue distinct is if it reduced the barriers to entry – turning what are de facto private events, organized and populated by the host – into public events where outsiders are more likely to come in for a listen.  The most obvious way to do this is to just bring down the cost of the cover.  Especially where a bar can recoup the perceived loss through bar sales, and fee-attrition, this shouldn’t actually be too much of a problem.  And in some ways, this is exactly how it should be.  Music venues in New York City should be making themselves available as places where people can go if they want to hear some good new music – not birthday party event spaces with a live band and a cash bar.

Additionally, it would probably make the phenomenon of gigging in New York City a lot less uncool.  It is, in fact, very uncool to realize that many of the music venues in New York City operate using the same business model as a Dave & Busters.