Karaoke Forums

I was going to reply to another thread, but went off on a tangent and decided it would be better to start my own thread.
Who sets the going rate? You, or the venue?
Why?


I think the same way. Part of the problem with the areas that are saturated is that everyone is trying to get the gig so they under cut to the point that they end up cutting themselves out of pay altogether! There are some places that you must do the show for free if you want to work! What's the point then?
I can't imagine how anyone gets any benefit from a situation like that, but that's me.
It's a vicious circle that gets started with exactly what you're facing now. You know someone else will do it cheaper and so does the venue, so you feel the pressure to drop your price. Knowing this and feeling economic pressure (you need the money). you will drop your price and carry on until the venue thinks they can find someone to do it for $75 (and in an area like yours, they always can). And so it continues until you end up working for nothing! The problem is, the venues don't always realize that cheaper isn't necessarily better, and oftentimes, you get what you pay for!
In my area, there are not that many of us and we can well afford to set the rate.
My longest running gig wanted to pay me $150 in the beginning, which is pretty bottom of the barrel here. I stated my price of $175 (which was still pretty low - but I figured I'd negotiate later - not a smart thing to do!) and got it because I was willing to walk away from the gig. The owner figured he could find someone cheaper, but since all the hosts in the surrounding area are pretty much on a par as far as rates go, and the others were busy anyway, he found he couldn't replace me for cheaper like he thought.
All the Kj's in the area have a loose connection to each other and we try to keep our rates up and not undercut each other, within reason (economy factor notwithstanding).
While I wanted the gig and could have really used the money, I was not going to let him set my price. I know I'm worth it, and now he does too.
I successfully negotiated my raise to $200 and then again to $225, but that's a whole other story! I now will not leave the house for less than $225. My friend who lives about an hour away charges minimum $200. Although she's been in business at least 10 years longer than me, I charge more because I have a better library, better equipment, and I have decent mixing skills.
I have often helped out my friend, giving her leads on good deal on new discs, helped her out with connecting her equipment in a better way and given a few hints on mixing. I've had her fill in for me when I've had to be away and while the customers and venues are satisfied that karaoke was not canceled for the night, and she did a good job, they sure are glad to have me back! This kind of thing helps to validate to the venues why they pay me what they do and that it's definitely worth it for them!
What are your thoughts on the subject?

PS: Nice to see you again Babs! I've missed you!

There are lots of factors at play here:

1. What is your cost of doing business? In other words, what does it cost your business to keep it's doors open, drive to the event, maintain your library, equipment, etc?

If it costs you an average of $500 a year in equipment replacement/repair and you do 50 shows - the cost is $10 per show. Add in the library and everything else and if that cost per show is $75 - do the minimum wage math. If you played your show for just the difference - could you make more money working at McDonald's? In other words, if McDonald's paid $7.50 per hour, and your show was 6 hours - if you're not making at least $60 then chances are you should find someplace else to work.


2. How much of the bar business are you responsible for? This is a tricky one. In other words, if joe average karaoke guy was there and they'd do $1000 in business, but because of what you do they do $1500 - then you have a net plus on their business.

Learn a little about the bar business and it can help you to drive sales and help them make more money. If you can show that you are responsible for the increase, it puts you at an advantage - for keeping the show and for making more money.


3. 10% of the pour is the most a bar is typically willing to pay for entertainment. If they only pour $1000 in liquor, $100 is a fair price for entertainment FOR THE BAR. If they can't get entertainment for that, then they need to find other alternatives - be it poker, a jukebox, or something else.

Having managed a bar, not every night of the week will make sense to have entertainment or to change up the pay. Sometimes a slow night will have entertainment which 'takes' from the 'pour' on the busy night(s). That means that just because you're there on a busy night doesn't mean that you should get paid a lot more money.


4. Talk with the bar. See what they're wanting, and their goals are. Help them to achieve them. It's more than running a show - find out how they make their money and them help them earn more money. Tell them to compare the receipts for the time period before you were there - and then for each of the next 2 months to compare. They should see an increase in sales... and this helps to justify more money.



If you look at the above, the first factor determines what YOUR requirements are to 'walk out the door/unload your vehicle'. The rest are about what you provide to the BAR. In other words, WHY YOU? Why not someone else who's cheaper? PROVE IT.


I ran a bar for a while when I lived in Alaska and it was a shocking revelation on the accounting that happens in a bar... especially when it's the 'slow' season of the year.

Nice post!


Isn't it, though? I ran one once as well. Never again! Most people think there's tons of money to be made.... notsomuch...

Anytime you have supply exceeding demand you're going to see prices plummet, and it's no exception with services.

With the over saturation of available KJ's willing to work for next to nothing, combined with so many just terrible no personality hosts, it's getting more and more difficult to cold call clubs for bookings.

Experience, word of mouth, and demonstrated ability to draw and retain a drinking crowd is what lets you write your own ticket in the KJ/DJ biz.. and even after you've established yourself, you still can't reasonably expect to get paid more than 10% or so of the gross sales unless you're charging a cover charge or something.

I get most of my bookings from patrons of the clubs i'm at either booking me for their private parties (where the REAL money is at) or having them recommend me to their regular bar after seeing my show while visiting a bar or party i'm playing.

Even then, i'll have a bar owner call me and tell me he's had dozens of his regulars specifically request me.. but when I tell him $150, they fire back with, "I was paying the last guy $65 plus 4 free beers!"

It's true you get what you pay for, but that only matters if you have a discriminating audience.

So far, I play mostly clubs and parties. I can make more at the parties. The clubs pretty much know who's available and they will just get someone else if you don't play for what they pay. They also don't open the doors to the general public, so crowds are at a minimum. Those that come for food and stay generally complain because it's too loud or something. I would much rather be playing in a club with a crowd and a variety.

This area has more pirates than the Caribbean and every club seems oblivious to any issues discussed here. Don't know what the answer is, but I'm not certain reporting them will score any points with the venue owners.

_________________
Join Us on Facebook!
NW Ohio Karaoke

There are a lot of factors but it is really just supply and demand.

How many people have enough money and time to do a decent karaoke show and how much their minimum rate would be.

In some places it may be a lot, in others it will be practically nothing.

In my town the majority of DJs, Bands and KJs work for free or nearly free, there is just a huge oversupply.

As for the 10% of the take rule, also pretty hard to make that a solid rule. If a bar charges $5 for a beer that they buy for $.50, 95% of the sales can be profit. On the other hand some places charge 1.50 for the same beer and the a lot more of the sales is hard costs.

In a town where the average bar goer is going to spend $5 a night expect much less pay than where the bar patrons are spending$25.

The differences in profit margins by area can make it very hard on the KJ in some areas because the cost of songs and PA systems are pretty much the same everywhere due to the internet, and regional differences in the cost of identical KJ rigs are minor.

The biggest problem as I see it is that it is very hard to differentiate the good from the bad and demonstrate why you deserve more than the next guy. And it's not just going on with Karaoke, it's happening with bands too. Now that PA and all this equipment is getting so cheap and any Tom, Dick or Harry can self educate themselves just enough to be dangerous, we're flooded with people in this business. Very few bar owners pay enough attention to figure out the difference between one KJ and another. Even fewer will actually understand the impact that one KJ has versus another.

So you can certainly be very strict about how much money you will take and not go below a certain amount but you better make sure you can justify your pay with your performance. Personally, I don't take any show that pays less than $200 these days. It's just not worth it to me and I can justify why I'm worth every penny of that $200. This is why I was able to quit three regular gigs and still get calls regularly to do ad-hoc gigs.

Now I'm in a convenient situation where I don't rely on my Karaoke income for much of anything. I don't need nor do I want a weekly gig. I can turn down a $150 gig knowing some other schlep will take it gladly for that price because I'm not worried about losing the gig. I have to admit, I have fun telling bar owners they can't afford me and that they should look for a cheaper option. Maybe they think I'm being cocky but I just don't care. I'll get paid what I'm worth or I won't do the show, I have other things in my life that I could be doing too so I have no reason to settle.

_________________
DJ Tony
Let It Rip Karaoke

I'm kind of lucky in this respect, too. After ten years, I've developed a good reputation. I have as many gigs as I want/need. I've had a number of venues contact me who I couldn't accomodate, either because I was already booked on the night they wanted, or because they didn't want to pay my rate. Some of them seem quite shocked when I won't agree to do a gig for $100-$125.

When you don't "need" the gig, it's much easier to convey and maintain the "perception of quality" that is required to get paid what you deserve. But if you demand a higher rate, you need to be able to back it up.

Almost every bar/restaurant in this State is still offering Karaoke on one night or another. The rate is set by the AVERAGE of what the market will bear and what the average KJ will work for. -- Size of Venue - Day of Show all come into play into the mix. Shows range from a low of $125 to a high of $250 for bar type gigs.

CASH ...........

When looking for a new gig. Almost every owner/manager looks at me with shock and dismay, when I say $175. The most common response is......is that for both nights or we can't pay over $75-$100! The last guys was only $50! The fact that they're not there no more or the fact that they did nothing for their business.......means nothing!!

MrD

_________________
[highlight=midnightblue]MrD - KJ/DJ Specialist
Visit MrD on facebook - mrdsentertainment
& on myspace - larrynance[/highlight]

Exactly. $200 is my bare minimum. It's just not worth it for less.



I tell them: "You could probably get some loser for FREE if you gave him free beer and a burger. And we both know the quality of person/show you would get!". You wouldn't hire a Cook or Bartender or Band that way...you get what you pay for.

In my opinion it is a matter of reputation in combination with the quality you offer. My area is kind of saturated with KJ's. I think there's at least 8 different companies. Still I maintain 6 nights a week of work with $200 pay each, because of my reputation in regards of sound, reliability, professionalism and last but not least following.

I remember one of my venues (I replaced one of the "don't give a (@$%&#!)" KJ's) the GM came in the first night I was there. After a while he came up to me and said that a) I brought in more business the first night than the former KJ ever did and b) he never knew that Karaoke can be that good. That went down like warm butter...

So bottom line is, as long as you're professional and keep a good reputation, it will spread via mouth to mouth and you will get the price you demand from most places. And if you have a steady amount of shows, you can say no to the few who don't understand the difference between a good and a bad KJ/show.

Well in the UK as well as the heavy competition
pubs are closing all over the place.

Can't imagine what it will be like in 10 years time.

That is OHHH SO TRUE!!!!!


5 years ago in my area there were 5 KJs. 1 Year ago down to 2. The wife and I were always trying to upgrade our music and equipment to make us better (WAY BETTER) than our crappy competition.

We started 5 years ago getting $150 a nite (4hrs), now we get $250 a nite. I will give a discount for multiple bookings (once a month $225, twice a month $200). I do have one gig I get $150 for, but it is for a very close friend that owns a bar.

Karaokemeister, that was one of the best and most informative posts I've seen here. Thank you very much. If there's anything else you'd like to share from the bar perspective, I'd be interested in hearing it.