A Lesson From the Pirates

Yes I am a pirate

            —Jimmy Buffett

I have alluded—hell straight out said—on more than one occasion that ours is a business largely populated by people who would have been pirates in a generation long gone by. Note that this is not an indictment of the morals ad ethics of those in the live sound biz—well not most of them anyway. It is more about the attitude of adventure and the drive to get it done despite the odds against and the obstacles thrown before them.  (If you really want to get into it, there are some that will tell you that some of the more historic pirates were originally doing what they did under the sanction of a government and became outlaws when that sanction was removed.)

So, anyway I am a regular reader of Wired, and in a recent issue they ran a piece called “Cutthroat Capitalism” about the pirates operating off the coast of Somalia. No doubt that they are criminals, but as the article points out, this is a business. Wages are based on a multiple of the average per-capita Somali income. Shipping companies weigh the risk of attack against the increased cost of sending a cargo ship around the Cape of Good Hope. The pirates operate based on an organizational chart more detailed than most companies I know in the live event production industry, with the equivalent of a board of directors and outside investors who get 50 percent of the take.

But here is what really stuck with me. Putting everything else aside, there is something of a code about how much money to demand and actually settle for. It is based on previous ransoms paid, and they will not go below a certain point lest they risk the ire and retaliation of other pirate crews. One crew lowering their price screws up the “business model” for everyone else. Everyone—from the shippers to the navies to the insurers to the private security companies that conduct negotiations to the pirates themselves—operates on cold hard numbers, and if one crew brings their prices down by too much or too often then it brings down the potential value across the board.

I have seen this happen even with the few small sound gigs I do. Often I find myself in need of doing a gig in order to review a piece of gear for a Road Test. But if I take a gig for little money because I need to get a review done and in doing so take a gig from someone else I not only screw that company I—by extension—screw everyone in that segment of the industry because I have lowered the value of the gig. And the next time a similar gig comes along whether it is me or some other soundco doing the gig, that lower price where be place where negotiations begin.

I know I am far from the only guy out there driving a console who also occasionally straps on a guitar and works the other end of the mic and I have had the same situation come up there as well. We had a self-described promoter out trying to book some gigs and after some time she came back with some stuff—at about 20 percent of the minimum I usually book for. And things are tight enough that some of my band mates were pretty pissed off when I turned the gigs down. But do one gig for less than a grand and you become a sub-grand act forever.

We face the same dilemma on an almost daily basis with FOH. As our corporate-owned competitors drop their prices for advertising to new lows seemingly every month, we face pressure from some companies to do the same. Like most of you reading this, we are running just as lean as we can and have the “mostly an advantage” of not having to report to a big corporate parent which lives and dies by quarterly numbers. And as much as it hurts to lose some short-term cash flow because of it we have largely stuck to our guns in terms of price, we know that we are steering the right course for the long term. Getting you the info and features you want does not happen in a vacuum, and we know that if we drop trou now to get the deal that, raising rates back to where they should be when things turn around will be difficult if not impossible.

So when that call comes in from a long-time client who wants a 30 percent cut in their already negotiated rate, keep that in mind. Maybe you make a token cut to make the client feel like they got something, but think hard before you cave on an unreasonable demand. If they really want the price lowered that much, then you may lose them. But the person they hire will have cut corners so much that he will likely screw up the gig and the client will be back eventually if they care at all about quality of product and service.

And you won’t have a bunch of angry sound guys knocking at your door asking you to explain why you dropped the going price in your town by 30 percent. For everybody.