Sofar Sounds Secures $25M Funding While Musicians Make $100 A Show

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Sofar Sounds has announced $25 million in new funding led by Battery Ventures and Union Square Ventures with participation from existing investors namely Octopus Ventures and Virgin Group. That brings total investments in Sofar to $31 million. Three months ago, former Spotify and The Echo Nest executive Jim Luccesse was named Sofar CEO.

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“It’s absolutely mind-blowing,” said Sofar founder Rafe Offer, “and I’m excited about the opportunity this creates for Sofar to grow, creating new products for artists and tools for our global community to deliver on our collective mission to support developing artists.”

The UK based company has built a global network of house concerts and other intimate live music venues in more than 430 cities. Sofar currently averages 600 shows per month, and to date, 25,000 artists have played shows for the company.

How Sofar Artists Are Paid

While the promotional value of playing Sofar shows should not be discounted – you can decide if 40 of the 25,000 artists who’ve played its gigs going on to be nominated for or winning Grammys is impressive or depressing – the now very well funded company has consistently come under fire for underpaying musicians.

“I love almost everything Sofar does, it’s almost the best concept, it’s almost the next best thing for musicians,” wrote indie musician Joshua McClean, who used to play Sofar shows, ” just include us in your business model, pay us, and don’t exploit us. “

Tickets for the typical Sofar show are $15 – $35 for a three-act bill. Each act is usually paid just $100, with the host getting nothing and Sofar keeping the rest. The average Sofar gig grosses $1100 to $1600 and often more, according to a Techcrunch report.

Given that Sofar’s financial risk and obligation is limited to $300 in artist guarantees and some legwork, the company would seem to be being less than generous with the artists who provide all of its content.

“On the surface, it appears that Sofar Sounds is the first startup to have actually gotten everything right with their business model: community, great music, big audience, intimate setting  –  they even give a pitch before each concert about the importance of seeing live music. All the stuff you want in a performance/listening room experience,” says McClean.

“Sofar, however, seems to be just fine with leaving out the most integral part: paying the musicians. This is where they willingly step onto the same stage as companies like Uber or Lyft –  savvy middle-men tech start-ups, with powerful marketing muscle, not-so-delicately wedging themselves in-between the customer and merchant (audience and musician in this case). In this model, everything but the service-provider is put first: growth, profitability, share-holders, marketers, convenience, and audience members  –  all at the cost of the hardworking people that actually provide the service.”

While the dissatisfaction with Sofar Sounds seems justified, it is important to note that a lot of the funds collected in most Sofar Sounds’ cities outside of the main markets of the US & UK are utilized in managing the community, paying the contractors for the equipment and upkeep of resources.
Sofar’s business model has been questioned repeatedly but the entity keeps growing amidst creating a noise and more importantly, great music content which a lot of the independent artists cannot afford to produce by themselves.

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