When the Amyl and the Sniffers’ free show at Federation Square was cancelled on Friday night due to safety concerns, the band worked quickly to turn this disappointment around.

Using their performance fee, they placed A$35,000 across the bars of seven prominent grassroots music venues around Melbourne.

Many celebrated the band giving back to spaces that had nurtured them in their infancy, while providing much needed support to a struggling sector.

However, the gesture raises questions as to why these spaces are not already supported. And why are musicians – rather than governments, audiences or the community at large – the ones that need to step in?

Grassroots venues are struggling

Independent, grassroots music venues have been doing it tough. Australia has lost 1,300 venues and stages in the past five years.

Music venues have always been precarious. But inflation and exorbitant insurance costs have made running a venue exceedingly difficult.

Audience behaviours have also changed. Punters today attend more major events at the cost of attendance for smaller venues.

Audiences are also drinking less. This is an existential challenge for these venues, whose primary revenue stream is alcohol sales.

Despite this significant shift in the market, venues appear reluctant to change their business practices.

James Young of Melbourne’s Cherry Bar recently praised the same large arena tours that often draw punters away from grassroots venues for stimulating increased drinking in CBD venues, revealing the priorities of these spaces.

Meanwhile, owners of The Tote and The Last Chance Rock & Roll Bar have decried the lack of government support, while begging punters to come to more shows.

Such responses do not consider the fundamental ways in which the market for live music has changed, or whether live music should be subject to the market at all.

Is a commercial model fit for purpose?

Australian grassroots music venues largely conform to a market-based model of alcohol consumption that cross-subsidises cultural activities like live performances.

Live music may often attract considerable audiences, and young people are spending more on entertainment and leisure – particularly for major concert events. But grassroots music venues often use music as a “loss leader” to promote increased liquor sales.

Such a business model may have been lucrative in the 1980s and 90s. But as audience behaviours have changed, a rethink is needed.

In much of northern Europe and France, there is a strong precedent of nonprofit venues receiving operational subsidies from municipal governments to avoid reliance on alcohol sales.

These models maintain strong public support thanks to disciplined and professional advocacy from the sector. Advocacy has also increased in the United Kingdom through the work of the UK Music Venue Trust.

Having made significant progress on a big ticket levy aimed at supporting grassroots venues, the Music Venue Trust has also encouraged many small venues in the UK to transition to nonprofit corporate structures. As nonprofits, these venues become eligible for greater public funding and tax exemptions.

France’s Scene de Musiques Actuelles (Contemporary Music Venue) model also promotes engagement with disadvantaged communities, facilitating greater accessibility and diversity in return for public subsidies.

This stands in stark contrast to Australia’s alcohol-dependent, market-based approach, which often attracts a homogeneous audience that may not reflect contemporary, multicultural Australia.

Structural reform

Grassroots music venues require structural reform to reduce their reliance on alcohol sales.

Such reform could involve nonprofit structures, such as Lazy Thinking in Dulwich Hill, soon to be incorporated as a registered charity eligible for tax-deductible donations. Charity status also reduces tax obligations on wages and salaries.

Other reforms involve who owns the building itself.

Commercial rents and overheads are exorbitantly expensive. Insecurity of tenure is a recurring problem for venues, such as in the case of The Curtin Hotel in Melbourne and The Crown & Anchor in Adelaide.

In the UK, Music Venue Properties operates as a collectively-owned community benefit society. Through crowd-sourcing shares and donations from passionate live music fans, the organisation is able to purchase the freeholds to grassroots music venues. Through this, they can protect them in perpetuity and offer long-term cultural leases to their operators.

Apart from some additional top-up funding from government, the scheme requires little regulation or intervention to be successful.

Other successful non-government initiatives include voluntary ticket levies, such as in Germany and Wales.

Such community-led reforms are possible in Australia, but require an acknowledgement of the many important non-market roles venues perform and some (literally) sober thinking about how best to support them.

Musicians save the day, again

Amyl’s act of generosity towards seven of Melbourne’s grassroots music venues might have been unprecedented, but it was not surprising. The band is known for their commitment to crowd safety, community spirit and generosity towards fans.

But should the band have been the ones to make it up to the city? Particularly in a chronically underfunded arts and cultural ecosystem that requires musicians to cope with the rising costs of doing the work they love.

Musicians, venues, governments and other industry stakeholders need to work together to ensure that this ecosystem is valued for what happens on stage, rather than just what’s exchanged over the bar.

Read more: Civic squares as contested spaces: what history and urban planning can tell us about Fed Square

This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Sam Whiting, RMIT University and Megan Sharp, The University of Melbourne

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Sam Whiting receives funding from RMIT University, the Winston Churchill Trust and Sound NSW.

Megan Sharp does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.