The pandemic has already been very hard on musicians, venues shut down for many months and the music business barely survived. I often wondered how some bands could even make it… was selling merch the only way to make money for a while?
It’s actually very hard for touring bands to make money on merchandise. The BBC’s Newsbeat just exposed the details of what’s happening on the other side of the Atlantic (the UK) where bands generally have to pay someone to run their merch table if they don’t run it themselves. No matter its price, a t-shirt is obviously never 100% profit, but many venues also take up to 20% of merchandise sales, while concession companies running merchandise stands take up to 25%.
The conversation started with a tweet from The Charlatans’ Tim Burgess who was praising venues that don’t take a percentage of bands’ merchandize sales, in contrast to 20-25% that other venues take. However, as he pointed out, venues and concession companies dealing with merchandise are often two different entities so you cannot always blame the venues, but this is still a huge problem in the music business.
“Bands should get the same percentage of take from the bar sales as they take from merch,” replied Warren Ellis who makes a great point: if people come to a venue to see a specific musician, they are going to buy drinks and bring more money to the venue, but I never heard of a venue giving percentage from the beer sales to a band.
According to some of the answers provided by some musicians, the same outrageous percentages apply to the US venues, which can take up to 20% on merchandise. Independent venues generally do not take any cut on merch, and some replied to the tweet to confirm it, but since several independent venues in LA (like the Echo or the Regent) have now been bought by Live Nation, they probably have to follow the same rules now. Independent venues still exist (here we have The Teragram Ballroom, The Troubadour…) but they became a rare opportunity for bands. Some musicians even refuse to sell merchandise when they play corporate venues.
If you are like me, you have probably noticed really high prices for bands’ t-shirts lately. Depending on the venues, it’s not rare to see items sold for $50, $60 even $80 and I am not even talking about sweatshirts. I suppose that the Hollywood Bowl, the So-Fi Stadium, the Greek Theater take a high percentage, and famous bands have to increase prices if they still want to make some profit. As for the diverse sites that sell merchandise, they obviously take a big cut too.
Bands merchandise is very big business though, “global retail sales of licensed merchandise and services grew to $280.3 billion in 2018, a 3.2 percent increase over the $271.6 billion generated in 2017” while “The U.S. and Canada accounted for 58 percent of worldwide consumption of licensed goods and services with $162.6 billion (up 3.1% from the prior year).” Despite the high prices, I have seen long lines at merchandize stands during popular concerts, so these numbers are not surprising, although they are also including sports teams and other sales unrelated to music.
Merchandise is still an important way for indie musicians to make money and most fans who are lining up at the merch table after a show probably think they are supporting their favorite bands: they just don’t know about the big cuts. Tim Burgess’s conversation was also approved by Peter Hook on Twitter, who added that, even though his band has its own merch seller, “some venues force you to use companies that they are partnered with.” There is no doubt that many musicians want a change in the rules and this may be the beginning.
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