Ben Lovett wears a unique combination of hats. He's a world-class musician -- and an entrepreneur. As one of the founding members of Mumford and Sons, Ben's seen every side of the music industry. He co-founded his own label, Communion, and is the co-founder and CEO of Venue Group. We learn why he decided to jump into the other side of the industry.
MESH VO: Hey everyone, Mesh here. This season, we’re bringing you behind the episodes and sharing longer excerpts from our best interviews. On last week’s episode, we explored how the pandemic has affected the live events and touring business. Today, we’re bringing you more from our interview with Ben Lovett, one of the founding members of the band Mumford & Sons.
You’re probably more familiar with Ben as a musician -- but he’s an incredible entrepreneur as well. In 2006, Ben co-founded Communion, a music label and artist management company. He’s also the founder and CEO of Venue Group, which is currently developing 10 venues and concert halls across the globe. Between running his own label, touring massive stadiums with Mumford & Sons, and pursuing multiple hospitality ventures at once, Ben’s seen every side of what makes live music enjoyable -- and profitable.
In this interview, Ben explains the business side of live performance and why venues are so important for their larger communities. We start off by talking about the necessity of touring for bands.
Mesh: [00:00:00] You know, obviously Mumford and Sons is a different level of touring but generally when you hear about musicians, touring is a really important aspect of their, not only revenue stream, but to get out in front of fans and whatnot. Like even in terms of your mid level artists how important is touring and how important is playing live? 00:00:21]
Ben Lovett: [00:00:27] Yeah, I mean, it, it's kind of undulated [00:00:30] in and out of the red and the black at that mid range level. So, for many years there was this thing called tour support, which was completely standard issue in the industry. Which was that, the record labels as a part of their marketing and promotion plan would provide the cash that would subsidize an artist to go out on the road [00:00:51] so that they could drive record sales. That was kind of the norm, really up until about 10 years ago. And [00:01:00] there's still instances where that happens. You know, you've got to think about, you take a 500 cap show. You charge 20 bucks a ticket. That's $10,000 of revenue. From that the show needs to pay its promoter, [00:01:15] the venue and so on and so forth. The artist might be able to make like two and a half thousand bucks from that show. From a sold out 500 cap gig. And they are away from home. So they've got, say call it [00:01:30] four band members. And they've got a few crew with them, so they need a few hotel rooms. [00:01:35] They need to have a day off every other day because they need to cover so much distance to the next city. So, you know, the margin is tight. And it really depends on how you tour and what you're trying to get out there. I've sat on some panels and heard various people be like, Oh, it's all about live now [00:01:57] right? It's more nuanced than that, [00:02:00] obviously. The live industry pre-COVID was the strongest it's ever been in history in terms of the number of people in volume going to gigs and also the value in dollars being spent on gigs. [00:02:13] So that was all good news. And I think to your second point, which is, is it a good way to, to get the word out there. I think, yes and no. It really depends on who you are as an artist. If you think, think over like Lana Del Rey or Billie [00:02:30] Eilish, or, you know, some of the breakthroughs in the last handful of years. It wasn't like they built up a live following. [00:02:36] You can launch lots of different ways. I think especially now the way that people are interfacing with social media, you can build up a relationship with an audience. I remember when BTS, the K-pop band first came to the UK. They were doing multiple nights at Wembley Stadium. [00:02:54] So you know, 80,000 people a night. And obviously that wasn't built up from [00:03:00] playing a show and people saying, oh, I like that. I'm going to go back and see that again. It was a remote content driven thing. In the case of Mumford and Sons, actually quite the opposite. We toured so hard and we played and played and played to different sized rooms, and got the experience of actually [00:03:19] playing I'd say the majority of venues across the US especially. Which led to you know, some of those early thoughts that I had, around wanting to get into the venue [00:03:30] space.
Mesh: [00:03:30] Well, let's actually, let's transition into that. Obviously given what's happened in 2020, especially with the pandemic, you know it's been a struggle for us personally, as fans. All our tickets are canceled, et cetera. Then I can't imagine what it's like for the performer themselves. But venues are suffering given they have no revenue stream and whatnot. And I would love to learn about your story on how you got [00:04:00] into this business and how you feel about it now.
Ben Lovett: [00:04:11] It kind of, it begins in my mind with Communion. But after a few years of the success of Communion in the UK, I moved out to New York. [00:04:21] We had nights going at a Rockwood Music Hall where we [00:04:30] still have actually got a monthly night...
Mesh: Love that place.
Ben Lovett: Yeah. Great, great, great place. Ken Rockwood is a real icon of the Lower East Side. And then we had Union Hall and a place called Public, which has closed down now, which was in Williamsburg. Anyway, [00:04:43] we're, we're trying to launch Communion, promote artists. And I found an issue in New York that I hadn't really been hyper aware of previously. Which was that the promoter and the venues were linked. It's called a closed room. [00:05:00] And essentially what it means is that I can't say, hey, I've just seen Jeff and the Jezebels playing this cool show. I want to go and promote that gig now in venue Y. Because venue Y will say we only, Jeff and Jezebels are welcome, welcomed to come and play at our venue, but you're not allowed to promote it. We're going to promote this show. We'll maximize our income here. You know, initially. [00:05:27] I was like, well, that's a real bummer. It stops your ability to [00:05:30] do artist development. The very thing that I was talking about being excited about doing. We'd been doing a lot of it in the UK. I found that in some of the other markets around the US it was less like that, or at least a bit more [00:05:43] open.
Mesh: [00:05:43] Would you mind explaining that just a bit more? Like // you walk in, you have a band and you want to promote them and you say, hey, I want this band to play here. They would agree to it, but // they would say, we're going to [00:06:00] promote it and we're going to take all the revenue from that. [00:06:02] Is that the right way to look at it?
Ben Lovett: [00:06:04] It's actually a little worse than that. They will say, um, no, you're not allowed to promote it. We promote in here. So not only will they not give you the commercials. They won't even allow you to bring the artists in. And I'd say that's true of about 75-80 percent of the venues in New York. [00:06:21] There was a great business called Bowery Presents that continues today. And great in the sense that they develop venues and built brand [00:06:30] new ones. You know, Music Hall of Williamsburg, Bowery Ballroom, T5, Brooklyn Steel now. And they helped artists grow through those venues. Not such a great company in the sense that if you wanted to come into those venues you couldn't. There wasn't a route in. [00:06:45] And I, I remember having a conversation, exploring ways to collaborate, and, and it was just a nonstarter. So, anyway, that really clearly had a deep effect on me. That, that revelation. I was like if you want the world to know about some artists, you need to be invested in and involved in their career. And independent promotions and independent music is all about that. But if you can't go into a venue, then you're leaving it up to the power of whoever owns the bricks. So two things needed to happen. And this, [00:07:30] journey began around 2014. I started looking into what would it take to own the bricks, you know, to run the venue side of it. But also what needed to change, so that the next version of myself who comes along in 10, 20, however many years, doesn't just knock on [00:07:49] my door and get told the same thing. How do we, how do we change the system so that we're moving towards an open room culture? And just like a restaurant, if you were chatting to someone about where to invest money, they say don't put it in a restaurant and don't put it in a venue.
Mesh: [00:08:12] Well, I'd actually like to learn, what are the economic components of a venue and how it makes money? Is it, is it just simply you book a band, you sell tickets and then you sell drinks?
Ben Lovett: [00:08:21] So, understanding how a venue makes money. I mean, fairly simple P&L. The way that we run Venue. We don't [00:08:30] partake in the tickets. That's the key thing with how we do things differently. The tickets we leave to the promoter and we don't act as a promoter as Venue Group. // We look at it in terms of how do we deliver an incredible open room for third party promoters. So, third party promoters [00:08:58] will bring the artist. They will sell [00:09:00] tickets. They'll pay the artist out of the ticket revenue. And they will obviously have incurred costs to market the show. And they'll pay us a room hire fee. So we from a venue point of view, we have the room hire fee, and then we have the bar. And the bar makes up about 95% of how open room venues make money. [00:09:22] That, that can be a little bit tricky. And this was kind of what led onto maybe our USP as Venue Group. Because [00:09:30] if your model depends on people drinking, and there's a show on, and people are watching the show. Uh yes, they might be getting a drink but it's not the primary reason why they're there. [00:09:42] You're living kind of in a derived value chain from the show, therefore there are people there, therefore people are drinking. Something quite unique happens [00:10:00] in every instance. But essentially a venue becomes a cultural beacon. And around it come bars, restaurants, thrift stores, other activities. And the whole thing becomes sometimes a block wide, hub of commercial activity, cultural activity. [00:10:28] And so we [00:10:30] realized that we needed to own and operate more of the pie to make the venue piece work. And that's why I describe Venue Group as a hospitality and entertainment company. Not just an entertainment company. We actually, much against the best advice, instead of opening a restaurant or venue. The answer was just to do both. [00:10:51] And so // we've developed two sites in London where we're doing this now. And // the footprint, broadly speaking, is [00:11:00] around 75/25. 75% is the kind of the doughnut ring. And then in the hole is the venue. And commercially it pretty much rings true. So the venue // is a break even proposition. [00:11:30] But then around it, we have a food hall. There's three restaurants. [00:11:40] There's eleven different bars. And it's just, it's a whole city block right next to the Tate in Central London. // But the reason why the whole place is cool is [00:12:00] the venue Omeara. Omeara drives [00:12:03] the context for everything.
Mesh: [00:12:37] And so basically you're creating your own demand if you do the venue piece, right? And then you benefit from letting it overflow into these other businesses.
Ben Lovett: [00:12:47] Yeah. So, I mean, like, I'll give you one hopefully easy statistic that will just unlock that for you. So, 300 capacity venue Omeara [00:13:00] And then we did 200 shows a year. So, about 60,000 people go to Omeara every year. And to Flatiron Square as a whole, uh, last year we had a million people.
Ben Lovett: [00:42:05] [00:13:13] So the theory is that those 60,000 people who are your really cool friend, your red hot kind of tastemaker, culturesetter. The person who's like, have you heard about this new thing? They're normally the people who are going into the music venues. And, and [00:13:30] people listen to them. And they will go to a show. [00:13:34] They will find out that we've actually got a pretty great vibe going on down there. And you can hang out and eat a delicious pizza at Basil & Fred. And have a fresh pint of cider poured for you. And you come back. But when you come back, you don't need there to be show. [00:13:50] So you get drawn in. // [00:14:00] And I know a handful of them, // but in terms of the returning customer on the venue side, it’s very low. And then the returning customer on the overall site is much higher. And [00:14:11] that's how we develop that community. And we welcome the community in, through the lens of culture. And that's why we call it the Venue Group, because the venue defines the group.
MESH VO: Ben Lovett’s plans for Venue Group are ambitious -- he already has two venues up and running, and just got approval for a third one in Huntsville, Alabama. Although the pandemic has certainly pushed back his progress, Ben’s mission hasn’t wavered, and he believes live music will come back stronger than ever.
This episode was produced by Olivia Briley and me, Mesh Lakhani. It was mixed by Valentino Rivera with help from Eduardo Perez, and featured music by Blue Dot Sessions.
To listen to the full interview with Ben, sign up now at thetalkmoney.com/membership. We talk about how he got his start playing music, the success of Mumford & Sons, and his experience in so many sectors of the industry. Become a Talk Money member to hear this and the rest of the interviews from season 3. Until next time.