Tough economic times hit Yoshi's, VIPs, and your CD collection

Last week, all the news about the economy was bad news. We've officially been in a recession since last December, and half a million people lost their jobs last month alone. And while you can talk all you want about San Francisco operating in a bubble outside the crisis, anecdotally, that's just not the case.

By now we all probably know someone who has been hit by a pay freeze, salary cut, or worse — a layoff; those of us who still have our gigs worry where the ax will fall next (um, have I mentioned lately how much I like my job?). It seems irresponsible to be frivolous with money right now when a good paycheck is getting harder to come by. (And the need for a quick buck is increasing: Amoeba Music manager Tony Green says the one area where his store's numbers are up is in buybacks. Customers are selling 15 percent more used CDs than in past years.)

So where's the good news? When it comes to the local music industry, we aren't in dire straits. But people are being pickier about where to spend their money, and what we support now could affect the future of San Francisco's music scene.

Overall, concert attendance was pretty strong in 2008. When 12 Galaxies closed earlier this fall, I spoke with bookers from the Independent, the Hemlock, Bottom of the Hill, and Café du Nord, all of whom claimed solid years financially. Live Nation's Lee Smith told me last week that his company — which books the Fillmore, the Mountain Winery, and the Shoreline, among other venues — had a good year, with record numbers for its amphitheater shows. Travis Hellyer, who handles talent for Mezzanine, says his club doubled its ticket sales, due in part to the momentum building on the space, which has carved out an important niche for hosting both DJs and live hip-hop and rock shows.

But there is a catch. Industry insiders say that on busy weekends — like this past Halloween — consumers were much choosier about going out, concentrating their energy on one event instead of spreading out their cash. People are also getting pickier about price points. "Shows that are under $20 do a lot better than shows that are over $20, even if the talent is super strong," Hellyer says. "It becomes a decision: 'Am I going to sacrifice going out to dinner once this week so I can see Common and spend $40 for a ticket?' That's versus $15 [for another show], which isn't going to make or break anybody who has a job."

Hellyer says a number of touring acts are responding by agreeing to negotiate their rates. But he's also dealt with artists who refuse to drop the cost of a performance — including one R&B icon who chose to skip San Francisco rather than alter his $40,000 asking price, which would've translated to a $50 ticket for concertgoers. "Most of the good agents and managers are cognizant" of the slow economy, Hellyer says.

It also makes sense that VIP packages would be on their way out. Paying a couple hundred bucks for preferential treatment seems strange at a time when all signs point to more cautious spending. "The big ballers just don't have the money to come out and drop $500 on bottle service any more," says Hellyer, who has had to adjust offers to touring acts based on a drop in VIP sales.

Local clubs are making other minor adjustments. Jocelyn Kane, deputy director for San Francisco's Entertainment Commission, says she's heard of more venues closing down midweek, staying open only for weekend crowds to conserve revenue.

But there is one San Francisco venue that spent 2008 mired in financial difficulty — Yoshi's. Since opening at the end of last year, the Fillmore Street jazz hub has earned well below 70 percent of its projected revenue, according to owner Kaz Kajimura. "We definitely struggled really heavily," he admits.

With Yoshi's, though, the blame doesn't come from our current recession so much as an overly ambitious plan for an upscale restaurant and jazz club modeled after the legendary Oakland venue. Kajimura says the San Francisco Yoshi's opened in December 2007 under a "dark cloud" because the construction costs were twice what was expected. Add to that the fact that Yoshi's didn't attract the hoped-for crowds: "We cut the costs down to the bone, but we're still not generating enough foot traffic to the huge space we've provided," Kajimura says. He says many nights the place has been half-empty, forcing management to find creative ways to generate extra revenue. The venue has already turned its showroom into a dance club with DJs once a month. It's also "aggressively branching out" into nonjazz genres (Yoshi's hired a booker from Minneapolis to expand into other styles of music), and recently asked the San Francisco Redevelopment Agency for extra funding.

Last week, Yoshi's announced a VIP Membership Club — where $700 or $1,000 a year buys you, among other benefits, advance ticket purchases, special seating, expedited service, and gratitude schwag. Kajimura says that based on patron surveys, the club expects a positive response. Maybe I'm on the wrong end of the pay scale, but it's tough for me to imagine people handing over so much money on top of ticket prices in these rocky financial times.

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