For a Musician with a Webcam, All the World’s a (Profitable) Stage

Stageit allows artists to livestream shows from a studio or their tour bus, and making a tidy profit in the process.

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On a recent April evening, 20 fans gathered to hear folk singer Ben Taylor play in his living room in Martha’s Vineyard, Massachusetts . The relaxed 40-minute set, which had all the production values of an acoustic performance on YouTube, cost $20 to attend. Fans were happy to pay that and then some—they collectively offered Taylor more than $300 more in tips, doling out dollars whenever he played a favorite song.

Instead of gathering at a single location, the 20 concert-goers were scattered around the country, watching Taylor perform through their computer monitors. The venue was Stageit, a website that live streams musical performances and allows attendees to chat with artists as they play. Judging by the excitement during the Ben Taylor show, you’d think fans were sitting in the front row at a concert hall. “My lighter was in the air!” one fan wrote in the concert page’s chatroom after a favorite ballad.

Taylor and hundreds of other artists have adopted Stageit as a promising new revenue source in an industry that has been bleeding money for more than a decade. Unlike other video websites, Stageit is primed for commerce. Admission to the site’s virtual shows is limited and costs a minimum of 10 cents. The shows are not archived anywhere, heightening the monetary value of the live experience. Artists solicit extra money through a virtual tip jar, which fans are often eager to fill—the average user spends $13.40 on a Stageit experience between tickets and tips.

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Part of the site’s appeal is its intimacy. Instead of broadcasting shows in huge concert arenas, Stageit performances are more likely to be filmed in an artist’s bedroom or on the tour bus. “We call it a front row seat to a backstage experience,” says Evan Lowenstein, Stageit’s CEO. A musician himself who made a hit song featured on Dawson’s Creek, Lowenstein has seen firsthand how the rise of Napster decimated the value of recorded music. Now he’s betting that an artist’s time will become his or her most marketable asset.

“Time is money,” Lowenstein says. “If you can’t get time back, that means time is the most valuable thing in the world. We can argue all day long about copyright infringement, what the value of a record is, but I know that time is worth something.”

Launched at South by Southwest in 2011, Stageit now hosts 10 to 15 shows per day and has been used by hundreds of artists. The biggest events regularly pull in tens of thousands of dollars, like a 20-minute show Jimmy Buffett streamed from his dressing room last year that raised raised $20,000 for charity. Overall artists generated $1.15 million in ticket sales and tips in 2012 streaming do-it-yourself concerts for select numbers of fans. 2013 sales are already tracking significantly higher.

Stageit earns money by keeping between 17% and 37% of the overall concert take, depending on the value of the show. For now the site is ad-free, but Lowenstein says he hopes to launch some branding initiatives around big concerts in the future. The company is not yet profitable, but it has attracted $3.5 million in venture funding from the likes of Sean Parker and Jimmy Buffett.

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While Stageit is still in the red, individual music acts are reaping big profits through the website. Pomplamoose, an indie rock duo that rose to fame by building a large following on YouTube, can generate more than $3,000 in tickets and tips for a 45-minute show shot at their home studio in Sonoma County, California. That’s more than the profits the band earned on a 2011 east coast tour, which generated more revenue but was also much more expensive. They now plan to incorporate a monthly Stageit show into their work schedule. “It’s really fun, and it’s great revenue,” says Jack Conte, one half of the group. “We make ourselves accessible to our fans, and I think people appreciate that. People are more willing to part with their hard-earned money if there’s that really strong connection.”

Much of Stageit’s appeal comes from the virtual tip jar, which allows attendees to give extra money to artists after buying a ticket. Pomplamoose charges only a few cents for its shows but is able to generate thousands of dollars in tips. Overall tips account for 60% of the revenue generated on Stageit, a surprising stat in an era when web-savvy music fans are used to acquiring anything and everything for free.

“People are inclined to give bigger tips when they know the person they’re tipping will know where the tip came from,” Lowenstein says. The Stageit concert page keeps a running tally of a show’s top tippers, and artists often give special prizes to their most generous fans.

As Stageit grows, competition for live online eyeballs is sure to increase. Ustream is a much larger livestreaming site that mostly broadcasts free content, but it launched a pay-per-view platform similar to Stageit in February. Free, live musical concerts are becoming more frequent on YouTube, but with Google expected to announce the video site’s first pay-subscription channels later this week, those concerts could easily be directly monetized in the future.

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Stageit hopes to stand apart by focusing very directly and aggressively on generating revenue for artists. In the long term, the site plans to have dedicated stages not only for musicians, but also for chefs, comedians, and authors. Lowenstein envisions an “eBay of experiences,” where people profit from the one thing that retains its value online—an individual’s time.

“We’ve told artists that anywhere they have a laptop and Internet is now a venue,” he says. “We sell access. We sell intimacy. We sell experiences. You cannot pirate an experience.”