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What is the Typical Profit Margin from a Rock Band Tour?

What is the Typical Profit Margin from a Rock Band Tour?

Rock stars are admired wherever they go, people look at them and think they’re living the best possible life. In the words of Nickelback: “I wanna be a rock star”. Everyone wants to be a rock star at one point or another in their life; it just looks so exciting and awesome.

But the reality is, becoming as famous as Greenday, Metallica, or Bullet for My Valentine takes a lot of hard work. And it’s not always as profitable as you’d think, especially when it comes to touring.

There are many costs and expenses that people don’t even know about that make rock band tours very expensive.

Join us as we take a closer look at what goes into rock band tours and how much profit bands actually make.

Big Numbers Don’t Mean Massive Profit

A rock band concert at night.

There are bands that make millions in sales of tickets for their tours. For example, back in 2001, U2 managed to rack up the 9th biggest venue gross of the year in America, making $6.4 million from the more than 78 000 tickets they sold. The tickets cost between $45 and $130 each. That is a big number, but this doesn’t mean they pocketed it all, unfortunately.

Of course, this number could go up a lot higher if more tickets are sold and the band has more performances. In 2015, U2 earned $19.4 million because they played eight shows and had cheaper tickets available, which means more people could buy and attend the tour.

But, gross earnings are not synonymous with raw profit. There are so many expenses along the way that you might even feel that touring isn’t worth it.

About 10% of a ticket’s fee goes towards the booking and processing fees. Taxes must be paid as well — in the United States, bands pay about 5% and in Europe, it can be as high as 35%.

Then there are expenses like royalties to be paid to songwriters. Promoters must be paid, other costs must be paid, and then the band members need to be paid for their hard work.

Fixed expenses can vary and there are many. Venue staff must be paid, the venue must be hired, electricity isn’t free, you need catering, the band and staff need a place to stay, there are medical staff and transport to be paid for.

As you can see, not every penny of a ticket’s cost goes to the bands you love so much.

Although the aim of this article is to explain the typical profit margin to expect from a rock band tour, it’s almost impossible to give one number. There are too many elements that vary from one tour to the next, all depending on the band, the location, and even the band’s fans.

We’ll try our best to explain what goes into a rock band tour and discuss some examples so you’ll have a better understanding of the profit that bands make when they tour.

Before the Show Starts

A photo of stage waiting for the rock band.

A rock band tour costs start even before the show is a thing. Promotions have to be good to ensure people actually buy tickets. Then, rehearsal time must be paid for. 

The stage set has to be designed and built. Not every band can afford to have spectacular lighting and massive screens, so they all have to do their best to keep viewers entertained.

Example Costs of a Rock Band Tour

A rock band singing their song enjoying.

Pomplamoose, the American indie music duo did a 28-day tour that consisted of 24 shows in 23 cities. They sold almost $100,000 in tickets, which really isn’t bad for a lesser-known band.

They were kind enough to share their experience, and discuss some of the expenses they had to cover. They had to cover everything on their own, spending $7,000 on one credit card and $17,000 on another. 

The salaries of their crew and band members were $43, 974 for their month-long tour. That’s a lot of money!

Overall, the tour cost Pomplamoose $147,802.

Here’s a breakdown of their expenses:

Production – $26,450

Equipment rental, trailer rental, lighting board, lights, etc, 

Hotels and Food – $17,589

A photo of breakfast in bed.

They paid for two people per room, four rooms per night, and stayed in non-fancy hotels. 

Gas, Airfare, Parking Tolls – $11,816

The band had many travel costs to pay as they traveled through America.

Gas, airfare, parking tolls. Holy shit, parking a 42-foot van is expensive.

Insurance – $5,445

This is something that no band can go without.

Salaries and Per Diems – $48,094

They gave every band and crew member $20 a day for food as they toured. And obviously, everyone had to be paid for their hard work.

Merch and Publicity – $21,945

A row of tv cameras for publicity.

Expenses included making merchandise, doing publicity on social media, the radio, and so on, as well as buying supplies.

Commissions – $16,463

The band’s booking agency naturally gets a commission for doing the work of booking the tour.

Tour Income – $97,519

This number is what the band got out of ticket sales.

Merch Sales  – $29,714

A black heavy metal t-shirts hanged.

From the sales of hats, posters, T-shirts, and CDs, the band earned quite a pretty amount of money.

Sponsorship – $8,750

Bands can make deals with brands and receive sponsorship. In this case, the band received three laptops to use for their light show, as well as cash.

Bottom Line

A band music performing on the stage.

The total income for the tour was $135,983 and the band had $147,802 in expenses. So they lost $11,819. 

Not every tour will result in the band swimming in money, and not all of them will result in losses. There are many factors that affect the outcome of the tour.

Touring Is Fun but Expensive

After looking at the costs of rock band tours, it’s clear they’re expensive. But if the band is able to get many people to attend and do multiple shows, they can still make a lot of money. Plus, tours are awesome for connecting with fans and growing your following. The typical profit margin will be different for every band and could even be different from one tour to the next.