With touring costs spiralling, artists mustn’t dismiss how much they’re wasting on FX payments.

The following MBW article/editor comes from Ian Flanagan, founder and CEO of Voly and its subsidiary, Music Voly. Voly Music has launched an integrated billing platform and financial management software to simplify and streamline budgeting, accounting and reporting processes for artists, managers, and business executives. business.

The entire live touring business depends on going through many markets. So it’s very much about the currency.

An important part of what we do at Voly Music is manage foreign exchange (‘FX’) payments for the clients we work with.

Here, I will try to explain why that is so much more important than it sounds at first.

Voly recently checked the touring expenses of one of our music clients. This artist is an arena-level artist with multi-market platinum records.

We pay special attention to checking foreign exchange rates and fees transacted on their behalf through a well-known large bank.

“I anonymized and rounded the data. But that’s real data, based on a field trip, that took place over the nine-month period before Covid. ”

I hope that breaking down what we’ve discovered about this artist’s touring finances will help every successful act out there – and the groups around them – take this part of their P&L more seriously. a lot of.

For obvious reasons, I anonymized and rounded the data. But that’s real data, based on a field trip, that took place over the nine-month period before Covid.

The artist in question toured many markets during this time, including Europe, the United States, the United Kingdom, and Canada.

The overall revenue generated is substantial, with the biggest costs of the tour being production and travel.

But there is another big cost, accepted by many artists as “just part and part of the tour” – those foreign exchange expenses paid to a big bank.

“During this artist’s tour, these FX fees amounted to no less than $650,000.”

During the tour, these FX fees amount to no less than £500,000 GBP (approximately $650,000 USD).

And here’s the headline: As Voly Music’s team processed this data, we discovered that – if this artist used our platform in conjunction with our chosen banking partner – they would save money. saved £336,814 (about $440,000).

That’s almost more than the cost of the tour’s entire dining budget!

To explain: instead of accepting the sometimes outrageous fees that big banks levy on touring costs, companies like Voly Music can take steps to make sure artists get good deals more at every turn.

In our case, those steps included: (i) offering currency call options at wholesale rates; (ii) take measures such as term arbitrage when necessary; (iii) use of prepaid cards upon request; and (iv) above all, use specialized technology to remove the hassles and pains of the entire FX process.

“This artist could have saved over $400,000 on this tour if they had used a company like Voly to just fix their forex fees.”

Like I said, this artist could have saved over $400,000 on this tour if they had used an alternative company like Voly to improve their FX fees.

That’s an insane amount of money for artists to hand over to big banks at a time when the music industry is being hit hard by factors beyond its control.

It’s getting harder and harder for touring artists to budget effectively in 2022. Fuel and energy costs go through the roof, plus the overall cost of living grows exponentially.

For example, it was recently revealed that British band Alt-J is expect to spend added $30k to $40k on their latest US tour thanks to an “out of control” increase in gas/gasoline prices.

Fluctuating and unpredictable exchange rates make planning even harder – and harder to make money.

Of course, a big part of why big banks omit this huge sum from artists’ profits is not just about money – it’s about time.

Voly Music didn’t start life in the music industry; Our business first achieved success in super yacht. There, we learned how certain pressures – especially on individuals – overcome specific business areas.

Captains of superyachts are running complex logistical operations that often involve hundreds of thousands of pounds/dollars. Every international trip they take comes with a myriad of costs to pay – not least fuel, food, equipment, and parking.

“A big part of why the Big Banks are keeping these huge sums of money away from artists’ profits is not just about money, of course – it’s about time.”

Often these fees need to be paid in multiple currencies, then reconciled to the accountants and finally to the yacht owner.

This isn’t too different from the live touring business, when you think about it.

With so much to do and so little time to do them, those responsible for running and managing touring budgets understandably default to the path of least resistance. That means letting important decisions like how to handle forex trades take up some time.

That’s why we’ve created a platform that can solve your problems. Because people don’t have time.

Tour operators face tremendous pressure to deal with complex financial procedures while ensuring every penny is properly accounted for. It’s easy to see why something like a bank down the street that charges so much for forex transactions is so easy to miss.

But depending on big-name banks to handle foreign exchange transactions can be costly – and cost an artist’s income.Worldwide music business