Can Concert Subscription Service Jukely Help Indie Music Artists More Than Megastars?

The first subscription service designed to benefit indie musicians more than megastars is looking to go big. One year after the recorded-music industry formally shifted from buying to streaming, a New York City startup called Jukely, which offers subscribers unlimited access to last-minute concert tickets for $25 per month, wants to fortify its position — and encourage the live-music experience all over America.

“We want to be part of live music,” said Sarah Weiss, Jukely’s head of business development. “We want to add to the concert inventory.”

Jukely has a lot going for it: a toehold in 15 of the biggest live-music markets in the United States, more than $10 million in seed funding from investors, and music industry machers including 300 Entertainment founder Lyor Cohen and Windish Agency founder Tom Windish among its advisers and investors. The company declined to disclose how many users it has.

Yet if it wants to fortify those positions, it’s going to have to overcome some major challenges. These include figuring out how to become a worthwhile partner to high-profile promoters and artists, who are doing fine on their own. It’s also going to have to try to grow in an industry that’s highly fragmented, regional and unpredictable.

“They have a very difficult task ahead of them,” said Gary Bongiovanni, editor-in-chief of Pollstar, a trade publication that monitors the live-music market. “To reach any kind of a scale would be a daunting task because there are so many variables.”

Win-Win?

If you’re a glass-half-full sort of person, you might see that abundance of variables as an advantage. The live-music industry is highly atomized, with more than 50,000 event promoters in the United States alone, according to market research firm IBISWorld, and aside from a handful of big fish, most of them are small businesses that move only a few thousand tickets every year, for shows that rarely sell out.

That’s where Jukely comes in. Promoters who know they won’t sell out their events can partner with the startup to list their shows on the app, and if a subscriber decides to go to one, Jukely foots the bill, paying the promoter an agreed-upon percentage of the ticket’s face value.

The promoter might not get full value for the ticket, but he wins, along with the rest of the concert’s stakeholders, in other ways: The promoter gets another body in the room, the artist gets to play for another potential fan, and the bartender gets to serve another patron.

“It's advantageous for promoters, venues, artists to get as many people in the door as possible,” said Ric Leichtung, the founder of New York events and promotions company AdHoc, who’s used Jukely to sell tickets to a number of his events. “Having what is essentially an all-venue express pass encourages people to see young, up-and-coming, emerging talent.”

High-Wire Act

But getting people to check out a band on a whim is one thing; getting them into a show featuring a band they’ve actually heard of is another. While Jukely’s service offers tremendous upside for small bands and promoters who are just starting out, it holds less appeal for promoters who book big acts in major venues, particularly with the top half of the live-music market in the midst of a yearslong growth spurt. More than half of the money U.S. consumers spent on music in 2015 went toward concert or festival tickets, according to Nielsen. Separate research by Pollstar finds that over the past five years, the amount taken in by the 25 highest-grossing North American tours has risen nearly 39 percent, from $1.19 billion to $1.65 billion.

Today, the average price of a ticket to one of the top-grossing concerts is now more than $74, according to Pollstar data, nearly three times what a Jukely membership costs per month. Even a substantial reduction of that price, which a promoter has little incentive to offer, would be hard for Jukely to handle.

That means Jukely has to find different ways to give its members access to top talent. The service already offers members-only shows in markets like New York, Los Angeles, San Francisco and Washington. This year, it will unveil a monthly series in San Francisco, and later this year, it expects to start doing members-only shows in Austin, Philadelphia and Chicago.

“As much as we like to get people to check out something they don't know, the hook is being able to offer in-demand shows too,” Weiss said.

The extent to which Jukely is able to do so could determine whether it's ready for the main stage.