Making Music, Making Money

How northern Michigan’s music venues turn a profit

By Kierstin Gunsberg | Aug. 3, 2024

From hosting nationally renowned artists like LeAnn Rimes and Norah Jones to local legends like The Sweet Water Warblers, northern Michigan is enjoying quite the melodic summer. And it’s just going to get better. This fall’s lineup includes Tom Petty cover band The Insiders at The City Opera House and Nashville indie-blues singer Phillip-Michael Scales at The Alluvion.

But while audiences are turning out to revel in the magic of live music, local venues, like pretty much every other business these days, are feeling the squeeze of inflation.

Keeping Time

An artist’s fee is only a fraction of the cost equation when putting on a show. As Chad Lindsey, executive director of City Opera House in Traverse City, explains, performance venues also cover an artist’s hospitality rider, which includes beverages, catering, and transportation for the band and their equipment.

Venues also often handle booking and covering the artist’s hotel stay—a tricky and expensive task during northern Michigan’s summer tourism flurry.

“We’ve got a show coming up that I need seven hotel rooms for,” says Lindsey. When all is said and done, show costs can run anywhere from a few thousand dollars for regional artists performing in smaller venues to upwards of $60,000 for bigger names performing for bigger crowds.

“We look at the numbers and then set the ticket price to try to offset that,” says Lindsey. “We decide whether to take a loss because it’s such a great concert and we just want people in the door or set a ticket price that covers everything, which could be shocking to people. It’s a risk we take.”

As for whether off-season shows cost less to put on, Lindsey says that too is nuanced. While the price of lodging and travel might come down after summer, other factors like weather-related flight delays can increase a venue’s outgoing numbers. Then again, those off-season shows are often well attended, as winter-chilled audiences no longer have the option to stay outdoors on beaches and biking trails. And it can be a great time to introduce less mainstream acts.

A case in point is the unexpected success of a Broadway performance at the Great Lakes Center for the Arts this past February. “We had a nearly sold-out house,” says Matthew Kacergis, executive director of the 525-seat venue. “We got great patron feedback. That audience was probably 95 percent full-time locals. You never know what people will be excited about until you give them an opportunity to experience it.”

Location, Location, Location

Another challenge to bringing artists Up North is that unlike Chicago and Brooklyn, we’re not really on the way to anywhere else, making northern Michigan venues a tougher sell to bands who want to pack their schedule with more high paid gigs and less travel time. But it’s a challenge venues are up for in order to provide live arts in NoMi.

“What we try to do is provide world-class arts without the drive. We try to bring people north of Grand Rapids, north of East Lansing, north of those ‘lower than the Knuckles’ cities,” says Lindsey.

“We want to offer a huge, eclectic variety and things that you normally wouldn’t get in such a small, intimate space,” agrees Matt McCalpin, director of operations and booking for The Alluvion, Traverse City’s newest arts and entertainment venue. “It’s amazing to see how the audience shows up fully engaged. There’s dead silence. It’s an intense, high-fidelity listening experience for concerts.”

Just the Ticket

So how do these venues stay in the black when the cost of everything from electricity to insurance has ballooned over the last four years? As McCalpin explains, the challenges of turning a profit are nothing new in an industry that’s historically run on slim margins. Venue directors like him are versed in balancing operational costs against ticket prices—and factoring in an audience’s willingness to pay those prices.

“No matter what town you’re in or what venue you’re at, that’s your number one challenge,” says McCalpin of ticket sales, noting that so far, The Alluvion has only had to cancel one show due to low sales.

“On the flip side, many of our shows have been very well attended, and a lot of them have sold out, so we’re really grateful for that,” he adds. “But it’s never a sure bet, that’s for sure. We hope that someday there’s such a thing as a built-in audience, but I think it just takes a lot of work and a lot of consistency.”

Ticket sales aren’t the only means to a profit, especially when it comes to smaller venues like The Alluvion, where seats are limited and performances aren’t garnering the prices of acts like Taylor Swift or Beyoncé. To offset the costs of putting on a show and pricing their tickets appropriately, The Alluvion offers a bar operated by and in partnership with neighboring cafe, NoBo Mrkt.

While concessions aren’t a big moneymaker for concert venues the way they are for movie theaters, McCalpin says that The Alluvion’s portion of the bar sales helps to increase profits. Every little bit counts as the venue works to pay artists a bigger fee to play there, “Because artists have always been overworked and underpaid,” says McCalpin.

Lindsey notes that part of the City Opera House’s strategy includes offering patrons the option to donate towards the upkeep of their historic, 130-year-old building when they’re purchasing tickets. “It really works because people do [donate]. They want to be proud of this cultural anchor,” he says.

When donations, ticket prices, and in some cases concessions (venues like the City Opera House don’t typically even offer them) can’t cover the cost of a show, corporate sponsorships can also fill in the gaps.

Balancing Acts

But perhaps the most important aspect of a successful show is the artist on the stage. Keying in on which acts crowds will turn out for requires a combo of research and intuition but, according to Kacergis, “There’s not really a perfect formula for how that works.”

To gauge audience interests, Great Lakes CFA sends out surveys after each performance and has staff in the lobby to collect feedback. They also plan to create a comprehensive survey for deeper insights.

“We’ve been doing this for six years now, so it’s time to take a bird’s-eye view to see what’s working well and where our challenges are,” says Kacergis, who does on-the-ground research attending shows at other venues. It helps him not only get a feel for the kinds of artists and experiences that excite concert-goers but also gives him the chance to connect with others in the arts industry.

“It’s been really fun over the past few years to get to know the community a little better,” Kacergis continues. “To see the audience continue to grow, and hopefully that indicates that we’re doing our job and listening and seeing what’s going to appeal to people and inspire them to keep showing up.”

Showing up—both as a venue and as an audience, is something Lindsey says is paramount to fostering a flourishing community arts culture.

“I think it’s never been more important to have live arts,” he tells Northern Express. “It teaches us to be attentive and listen to something longer than a TikTok video. It trains our attention and it makes us celebrate the people we’re with. It’s something to talk about that’s shared together at the same time—not ‘Did you see something that I saw?’ but rather ‘Let’s go see something together.’”

Photo: Frankie Moreno performs at Great Lakes Center for the Arts.