Opportunity Cost – The cost of taking that free gig!

Lavatory Records

For many artists who are just starting out in their career there is always the possibility of finding themselves in a situation where gigs or bookings will be rewarded by “do it for the exposure” phrase as much more polite way of saying “you will not get paid”. Many will usually rant and rave and start talking about exploitation and being taken advantage of. However, there are a few things one must consider before writing off an opportunity. This again is a principle of economics in regards to Opportunity Cost, starting from analysis of one’s economic situation at individual level. By mastering the principles of being able to stay within and below your means, you would then be able to maximise off opportunities through developing an investment.

What we are saying at Lavatory Records: STOP COMPLAINING! No one can do to you what you don’t allow. Think carefully before deeming situations as “exploitative”. Taking a free gig can be beneficial to one’s career if done under the right circumstances.

According to Investopedia “Opportunity Cost is defined as an alternative that must be forgone in order to pursue a certain action. Put another way, it is the benefits you could have received by taking an alternative action”. To put this in the context of a booking for an artist’s gig, not only are they booking your skill but also booking your time. One would then have to ask themselves, what can I put my time into should I decide to pass up on this opportunity? The time could go into things like making new music and/or extra sessions in learning an instrument of your choice… Perhaps even another gig! In this scenario if an unpaid gig were to come around, would it be more beneficial to just lounge around and drink some beers at home, or potentially gain new fans from accepting the gig? Especially if travelling to the gig is within reason and not hurting you financially.

Lavatory Records

The idea of this is to think longitudinally and gain experience; because in the corporate system remuneration structures are based on reward of performances and tenure of experience. This is the same way one needs to look at being a musician, that the more experience you gain the higher you can set your price point. With experience you learn to deal with the new challenges that arise and come to deal with setbacks, for the show must go on! If one can show that they care about putting a show more than their compensation, it increases their market value and likelihood to be rehired. Do not fall into the trap of trying to be one up on money at every turn, it will likely backfire at some point. For example, canceling an opportunity which you have already committed to because you have one on the same day that pays more is likely going to burn bridges and earn you a bad reputation! The stained reputation of being a paid mercenary is not something that an artist can wash away, neither is it a habit one can easily break. So rather do not embark on it. Especially, that in this industry situations change, the person you turn away today could be in a different market/financial position at a later point in time.

Granted, this is a business. However, show business is not modelled on casual transactions, but rather on the premise of relationship and customer/client relations. Meaning your earning power propensity is increased by your connections and the relationships you build, which establishes what one would call a Value Chain. This way you establish where a certain gig can take you and your career, instead of acting entitled. Along the way to establishing which relationships will create wealth for you, you need to evaluate character rather than currency. Your value will eventually translate into currency through your increased Bargaining Power, which is directly correlated with experience.

Lavatory Records

In conclusion, when deeming whether an opportunity is worth your while, understand what material gain comes from which situation as you grow. Do not seek to win battles and end up losing a war, pick your battles wisely and do not become an economic mercenary.

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