Music venue entrance

Starting a successful music venue – small business lessons from Tower Theatre

Tuesday, May 10, 2022

We've all heard the misquoted phrase from a certain baseball movie – "if you build it, they will come." And while building a baseball field in the middle of an Iowa cornfield might sound crazy to some, for others, it sounds like embracing the entrepreneurial spirit. Starting a music venue – or any business – can be a costly, complex process. But, when done right, it doesn't just belong to its owners but the entire community.

Stephen Tyler, CEO of Tower Theatre in Oklahoma City, Oklahoma, knows a thing or two about having a vision and bringing it to reality. He's built his career on creating a thriving, live music industry in a state that, for decades, exported its talent (shoutout to the Flaming Lips and Garth Brooks!) due to lack of spaces to train and hone their crafts.

Stephen sat down with Heartland leaders to discuss how the Tower came together – and what has been essential to its success and growth in the pursuit of creating a live music venue. The key takeaways read like an entrepreneurs handbook:

Meeting around a table

Creating the scene, talent to support a music venue

Stephen's interest in the music industry took hold while playing in a band in high school. As his interest in music technology grew, he faced a dilemma: stay in Oklahoma or go out of state to find a music technology program, like many of his peers were doing.

Like a true entrepreneur, he decided to stay and forge his own path–a momentous decision that has had a big impact on the music scene in Oklahoma City. That decision ultimately led him to help establish institutions and spaces that have built the overall live music industry in Oklahoma City.

"I did the standard things that musicians around here would do with working retail jobs, we all went and worked at Guitar Center," Stephen said. "I spent like eight or nine years there slinging music gear and becoming well acquainted with the industry and all the people in it. Every musician, every venue owner, every club owner came through that building at one time or another. And that's ultimately how I found my way to ACM."

Like a true entrepreneur, he decided to stay and forge his own path–a momentous decision that has had a big impact on the music scene in Oklahoma City.

Stephen went on to serve as the technological director at the Academy of Contemporary Music (ACM) with the University of Central Oklahoma from its founding in 2009 to 2017. While there, he helped establish their studios and maintain the facilities, including the Performance Lab, the school's music venue.

"It was very rewarding for me because I was helping to build a school that would have been there for people like me …. if that school existed 10 years earlier, I might still have a band," Stephen said.

By the time he met with The Pivot Project, a development group focused on projects that address community needs in Oklahoma City, he was convinced the city needed more spaces for musicians and ACM grads to practice their craft.

"I was like, 'This city needs a thousand cap music venue.' We need more venues that are drawing acts and starting to build that machine. And you could see that from ACM – you start cranking out talent, then where do they go? What do they do from there? "

Music venue entrance

Revitalizing a historical gem lost to time

The Tower Theatre opened in 1937, and has lived many exciting lives. It first served Oklahoma City as a movie theater, then as a church and then an adult movie theater.

As the city developed and began to sprawl, the Tower avoided demolition, unlike many other buildings, due to being off the beaten path. While saved, the Tower still sat dormant for close to 40 years.

"As I grew up, I would drive by and see that marquee and wonder, 'What was going on in there? What was that space? What's behind those doors?'" Stephen said.

Tower Theatre

Image source: Library of Congress

As the city developed and began to sprawl, the Tower avoided demolition, unlike many other buildings, due to being off the beaten path. While saved, the Tower still sat dormant for close to 40 years.

The theater was purchased in 2016 by the Pivot Project and the revitalization efforts began.

"I got a chance to come in and see it right after they bought it, and it was just a mess. There was a hole in the ceiling, the basement was flooded," Stephen said. "Their [Pivot Project] specialty was historic rehabilitation, and they put a lot of thought and effort into the rehab. They've restored the scallop plaster ceilings, refurbed all these chairs in the balcony and tried to really keep the character. They had this vision that it was going to be a concert venue and event space."

As the Tower idea began to manifest, Pivot Project began looking for someone with experience with music venues and the industry at large.

"It felt like a pretty natural fit for me to take a stab at stepping in and becoming that operator," Stephen said.

In March 2017, along with his business partner Chad Whitehead, the Tower's primary talent buyer, they started the operating company that manages the theater.

"We came to an agreement for operating in March and by August we were hosting our first concert," Stephen said. "So in that amount of time, we had to acquire all of the light, sound systems, staff up, start booking shows and really just take this business from zero to 60 in a matter of months, which was an intense pace. But we managed to pull it off. We love to tell the story that as the first tour bus was rolling in, the paint was still literally drying in the green room. We were that close to sort of getting it off the ground."

Lessons for creating a thoughtful, successful music venue

While most entrepreneurs won't need to consider tuning a room for live sound, there are still many key lessons small businesses can take from the Tower's success and growth. Building a healthy brand focused on customer experience, expanding profit opportunities, a people-first approach and growing sustainably are all ways to help your business be the best it can be. Let's take a closer look.

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Be intentional

The Tower was always a gem of a space, but to turn it into a great live music venue, it needed work. From the start, Stephen and his team were very intentional about outfitting and staffing the venue to showcase the music.

Whereas many venues rent technical equipment and hire out contract technicians, the Tower is a complete package. Stephen knew that to create a consistent customer experience that would delight ticketholders, investing up front in sound and lighting equipment and hiring permanent staff to run shows was the only way to go.

"By having our own sound system, it stays here, it stays maintained and stays tuned by our staff techs," Stephen said. "So it's the same people running those shows every time. They know the room, they know the system. It results in a really great experience sonically. Same thing goes with the lighting visually," Stephen said.

Investing in equipment up front, while costly, allowed the business to operate at a faster pace. Without needing to sub in and sub out gear, the theater could accommodate more shows without having to worry about the availability of equipment.

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Create an experience for everyone

Stephen acknowledges the great strides Oklahoma City has made in building its live music scene and infrastructure. But, the Tower still competes with venues in Dallas, Tulsa and other cities in the region, as many showgoers are used to traveling due to lack of options to see their favorite bands on tour.

That's why all of the Tower's staff, from the doorman to the bartenders and technicians, work very hard to create and support a quality, consistent experience for all.

"So we had to come into a market that didn't exist to start making that name for ourselves," Stephen said. "They know it's going to sound good and it's going to look good. They know their drinks are going to be good. They understand the pricing. They know what it's like to come in the front door. And then that just removes all those questions and concerns that somebody might have about, ‘Do I want to go see that show there? Or should I go see it somewhere else?'"

Music concert

Like a lot of new businesses, earning community trust and getting more name brand recognition was an early concern for the Tower. As a music venue, getting that buy-in didn't stop with ticket buyers and showgoers either. They also needed buy-in from the touring bands and musicians they hoped to book.

"We're a venue they didn't know, a promoter they didn't know in a city they didn't really have on their radar in most cases," Stephen said. "And so they hear from their agent, ‘Oh, you're going to play this historic theater in Oklahoma City.' And they're like, ‘We've never been there.'"

Making sure the experience was delightful and consistent was a big priority and has helped spread the positive brand recognition they needed.

Stephen explained, "They walk in here and are like, ‘Oh, this is not what was in my mind.' Our green room is like a little tiny apartment that people love. They come through and they're dealing with the same house person, the same production manager, the same person who's advancing the tours and working out the details. It creates consistency and understanding."

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Find opportunities to diversify and expand

One of the key hallmarks of a successful entrepreneur is their ability to seek out opportunities to expand and improve their businesses. Once you've built a strong brand and financial foundation for your small business, it's a good idea to be ready to strike when the right growth opportunity appears.

That's what happened for Stephen and Tower when opportunity came knocking. They saw potential for an expansion that was too good to pass up.

Once you’ve built a strong brand and financial foundation for your small business, it’s a good idea to be ready to strike when the right growth opportunity appears.

Typically, the majority of a concert ticket price goes directly to the band/musician – and only a small percentage goes to the venue. So while more ticket sales get more people in the door, tickets themselves don't yield as much profit for venues. Being able to diversify and find ways to heighten the experience can lead to more revenue.

"We look at where we can move the needle, how can we change the experience?" Stephen said. "What can we improve… can we do our own VIP thing – maybe the balcony is premium seats and they have their own waiter and get tables. We start to think about those things because really, there's not a lot of other opportunities for us in the concert space."

Being profitable for a venue comes down to getting as many folks in the door and providing them with a quality bar and concession experience – for as long as possible.

"We think people will buy more at the bar if the drink is better, the bartender is awesome, if the lines are shorter," Stephen said. "So that's where we start, focusing on the experience. Secondary to that is, are there clever ways we can keep people in the building longer?"

Serving drinks

The clever way to keep concertgoers at the Tower longer turned into acquiring Pony Boy, the bar next door, in late 2019. The team made an effort to acquire that space, which Stephen said ended up being one of the best decisions when they licensed the premises. The bar had music and DJ nights, but Stephen and the team shifted the focus of the space into a small music venue.

"We didn't own Pony Boy when we took over the Tower," Stephen said. "And what we would see is people would come into our venue for a two-, three-, four-hour concert and then they'd leave – but every single time that bar would be slammed. We'd just be sitting there going, they're capturing all of this extra revenue off traffic we brought from our marketing efforts and it just happens to be the literal closest place."

But like a true entrepreneur, Stephen turned a loss into a new opportunity for growth.

"You can now leave a Tower concert with your beer and walk into Pony Boy and keep going. It's great because then all of a sudden, we can throw after parties, now we can do corresponding DJ nights," he said.

This year, they're expanding to a third music venue, Beer City Music Hall, a 500-person capacity venue on the other side of Oklahoma City. It's yet another step in creating a space that will continue to help the music industry thrive in the city.

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Take care of your people

There's an old saying about a business' most important asset being its people. It endures because it's true. Every single part of a successful business comes down to people.

Businesses that nurture their workforce can be more profitable, lead more effectively, create stunning customer experiences, foster brand loyalty, close more deals and be the best they can be. That principle is clearly evident at the Tower Theatre.

According to Stephen, the core purpose of a music venue is bringing artists and audiences together to have a shared experience. A crucial part of producing the best shows isn't just about the right sound and lighting; it's the staff and their happiness as employees.

"Taking care of them, making sure they see those core values and they permeate everything that we do matters because it keeps them here," Stephen said. "They're dedicated and I've never specifically metered it, but anecdotally, I think we probably have one of the lowest turnover rates of any business that I know."

When the staff is supported, everyone within the show-going experience benefits.

"If the staff is having a crappy time, it's going to convey to the customers. If the customers are having a crappy time, they're not going to buy as many drinks. They're not going to enjoy that experience. If the artist had a crappy time with our production manager, that's going to translate into their performance," Stephen said.

"The entire environment has to be conducive to everybody performing at their best and experiencing their best. Otherwise, something is going wrong."

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Embrace technology that enhances experience

In the past, bigger venues like arenas might have the best technology available to please the crowd. But now, smaller and medium-sized venues have just as much technology to support that experience as the big guys.

For most small businesses today, embracing technology is key to success, and Tower Theatre is no exception. Technology at the Tower touches everything. From ticket sales platforms, websites and social media marketing to get folks in the door, to the point of sale ringing in drink orders, and the payroll systems that keep employees paid … technology is front and center.

To help unify their systems and keep everything running smoothly, the Tower Theatre uses Heartland payment processing, scheduling HR software Heartland Time and Heartland Restaurant POS technologies.

"We had a previous relationship for a while as a payment processing client only, and then we were looking to make a change in our point of sale system," Stephen said. "Heartland had recently launched the Heartland Restaurant point of sale. It just had the right features that we were looking for."

Some of those must-have capabilities include having multiple registers and tablets capable of handling a variety of complex transactions quickly, like opening and managing bar tabs, splitting checks, making global menu updates and time-specific pricing rules. Because music venue sales are high-volume during a short window, their needs often differ from those of standard restaurants and even bars.

POS System

"We're not a restaurant that's open eight hours a day, just slowly cranking people through. We're in this window of two or three hours of bringing thousands through, so it was important to find something to keep up."

Before 2019 and the acquisition of Pony Boy, Tower Theatre was using Square. Because of the nature of the venue's operations and growth, Stephen and the team had to reevaluate the tech they used.

"Square has a lot of beautiful features, they have a lot of high-tech back end. One of the key features that was missing from Square is the ability to to swipe a card and open the tab," Stephen said. "It seems like a very simple thing, but there's a whole mechanism of preauthorizing card and storing that information and capturing it that Square just hadn't figured out how to do."

Using Heartland Restaurant has made it easy for the Tower to heighten the experience for customers, and thus improve their revenue.

Using Heartland Restaurant has made it easy for the Tower to heighten the experience for customers, and thus improve their revenue.

"You can now leave a Tower concert with your beer and walk into Pony Boy and keep going," Stephen said. "You don't have to trash it at the door. Go to the dance party on the same tab because we're running Heartland."

Stephen says that they actively like to stay ahead of the curve to strive for the best experience possible.

"We're always adopting new and interesting technology to try to make the experience better for people," Stephen said.

Live band playing

Looking to the future of the Tower and Oklahoma City's local music scene

Tower Theatre and its companion venues are an important part of Oklahoma City becoming a stop for touring musicians, as well as helping homegrown talent find their audiences. According to Stephen, the city needs an "ecosystem of venues," at various capacity levels, from small venues and music clubs to medium and large venues in order to serve as a thriving music hub.

"What you have to have in a city like ours, especially to really land and stay on the map, is that infrastructure because a band won't want to come to your city unless they know they can sell tickets," Stephen said. "You need a 150 capacity venue, you need a 500 capacity, you need a thousand, you need a 3,000. You've got to have those pieces of the puzzle because a band wants to grow through a market. If you don't have that, you can't grow that artist in your market. And so you will miss those opportunities."

While building a local music ecosystem where touring bands and local bands alike have spaces to perform gigs, Stephen and team know that the target audience for their work is the community. Having spaces for musical performance is one thing, but the venues also can be places for the community to have places to gather.

"I mean, we literally have had funerals, rallies, political debates. Church service happens here every Sunday, it's everything," Stephen said. "The community needs those spaces."

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