Here you go Justin, thought i'd post my thoughts here because it might spark thoughts from other mud-dwellers. Some of this is repeating what others have said. I hope I dont offend anyone with my comments, they are written from my business head and not my music lover head!

1.        The benefit of a major folk event. Broadstairs Folk Week increased The Wrotham Arms profit greatly (Justin - I can give you spefics off-line). The Wrotham Arms is not on the main part of town, so other pubs probably benefit even more from the event.   I believe the event has prevented the closure of pubs in Broadstairs. The augmented takings help the pubs (and other local businesses) to stay open through the leaner months (Jan-Mar). The only pub lost in Broadstairs in the last 5+ years is The Albion Inn (known locally as 'The Little Albion'), which is out of the area of main Folk Week activity.

2.        Why Folk music struggles. I booked acoustic music (including folk). Generally the takings were lower on a folk music night, as compared to blues, pop, light rock. Reasons for this:
a.        Folk audiences tend not to spend too much – they are thriftier by nature. It's hard to quantify why this is, but one theory I have is that folkies tend to be teachers, social workers, etc rather than bankers, lawyers, and company CEOs. I know this statement is a vast generalisation and will probably get me into trouble!!!
b.        The music is often not as up-beat as other genres and so doesn't encourage beer swilling!
c.        Folk musicians that adapt their music to suit the regulars in the pub (Whisky in the Jar, Down by the Dockyard Wall, Irish Rover, etc) were seen as lowering themselves and sometimes boycotted by the purists. I am not saying either is right or wrong but it is important to keep the regulars happy from a financial perspective.
d.        Some folkies expect the pub to be quiet whilst they are performing. This is true of all music genres, but more so in folk. This could be due to the volume generally being lower in folk music. Also, it is more important to listen to the words (the story) in folk music, not just the melody. Interestingly the most annoying ssshhhhh's came from amateur folk musicians during sessions and were aimed at noisy regulars that frequented the pub every day and were more important in keeping the pub alive!

3.        Pub function rooms. I was somewhat involved with The Isle (of Thanet) Folk Club, which was held at a different pub in Broadstairs. The club was starting to be successful when the pub company owner asked for a room fee. The organisers were already spending some of their own money to balance the books and this fee request caused the club closure.   I could not hold the club at my pub since previous landlords had converted the function room to letting rooms. This is the case with several other pubs in Broadstairs – where the function room has disappeared for more profitable activities such as a restaurant or letting rooms. Those that do still have function rooms try to make them a profitable entity since the margins are so tight in the industry.

4.        Profit / loss on music nights. My calculation on whether a music night was successful … it was a success if the takings due to the music were 3 times greater than the cost of the music. For example, if I paid a musician £100 then I should have at least £300 in the till that would not have been there if there was no music. This takes into account the expenses (stock, tax, staff, licenses) from the gross takings. I never made a huge amount of money due to the music, but overall it basically paid for itself and allowed me to give at least one staff member work for the night. The Wrotham Arms was considered a successful music pub – and I just about broke even on it – I am not surprised that others aren't able to continue providing live music.

5.        The power of neighbours. I had a neighbour that decided we should not have music in the pub, despite music going on there for 20+ years and he purchased the house in 2006. The council threatened me with a review on the music license. The brewery told me that if this happened we would probably lose. Bear in mind that I was not booking loud bands – we rarely had drums and bass guitars but the rights of an individual have become so strong that it can disrupt live music venues tremendously.

Some general observations on why pubs are struggling:

1.        The cost of beer. Being tied to Shepherd Neame, I had to buy through the brewery. The price I paid per pint of beer was less than I could buy at Wetherspoons! All products had a massive mark-up. This is normal and is part of the business agreement as a tenant of a brewery or pubco but it really affects people's spending habits when there is a recession. It's as cheap to have a bottle of wine at home than one glass of the same wine in a pub.

2.        Smoking ban. From my experience the smoking ban helped increase takings since we had suitable space outside for smokers and many new regulars started coming to the pub when it was a cleaner atmosphere (particularly women with families). The smoking ban adversely affected pubs without suitable outside space (such as High Street pubs with no back garden).

Justin - I hope that helps and you have my number if you'd like clarifications or have other questions. Someone else that may be able to help (if he has time) is Dr Beau Weber at kentfolk.com who has done a lot of analysis on why live music is dieing in pubs.

Jen