Why Do Venues Take Merch Cuts From Bands? – We Asked People Involved
Unless you’ve been living under a rock for the past few months, the topic of conversation on the minds of bands, fans, venue owners, and on any social media platform you can find is merchandise cuts.
It has been a standard practice for years for venues to take a percentage of the money a touring artist makes at their merch stand. The venue sacrifices some of its floor space to allow artists to sell T-shirts, hoodies, vinyl, patches, etc. In exchange for this privilege, the artist must surrender a cut of those sales.
Artists across the board, big and small, and even beyond heavy music genres have been voicing their concerns with the rising percentage of profits taken from their merchandise sales at events by the venues or promoters. Bad Omens, Architects, and Born Of Osiris are among the growing list of artists who’ve grown tired of this industry model and spoken out about the practice.
Some artists have even refused to sell merchandise at their concerts because of this, and it’s sparked an even wider conversation about the impossibility of being a musician and making a living through streaming profits, ticket sales, and merchandise sales that’s made its way to the U.S. senate.
On the other hand, venues and live event companies have equally been transparent about the detrimental economic effects of the pandemic on live events and how they’re still recovering from it. This suggests surges in prices are to reflect a recoup of losses from canceled events, venue foreclosures and industries that were near bankruptcy.
With this cultural boiling pot steaming over, Loudwire has sat down with musicians, touring crew, managers, venue owners, and other knowledgeable industry forces to get a greater perspective on this from all sides.
Okay, But How Does it Work? Bands Explain Merch Cuts
Igorrr fans will remember last month (March 13) the band made headlines for refusing to sell anything at their London, U.K. show due to the venue's requirement to take 25 percent of all the merchandise profits. “We tried to negotiate, proposing solutions, but they didn't want to hear about it and did not answer,” says Gautier of Igorrr.
Everyday concertgoers might not understand the complex gymnastics of merchandise business models, but Gautier explains that as well as venues imposing merchandise fees for you to sell at a show, they also may license their concessions to an independent third party to sell for them. That means that they will pay staff to sell your merchandise for you.
However, such as in Igorrr’s case, many artists already have a dedicated merch seller on tour with them. “...she knows every item of merch very well, knows the sizes, the printing techniques, the fabric, and how to advise and give the right information to the people if needed,” Gautier explains. “She has a legal working contract, we pay taxes on it, and we have our own payment system, we pay taxes on it as well and we want to keep the prices as low as possible and the quality very high.”
He continues, “In the case of London particularly, they tried to impose their payment system on us with their taxes on top of our taxes, plus they tried to impose a seller. This person doesn't know a single thing about our merch, they wrote Igorrr with three mistakes (for real) on her introduction email, and on top of that, they take a 25 percent profit, so we should have sold our merch 25 percent more expensive than usual – we preferred to lose money than give bad service to our fans.”
Tobi Duncan of Trash Boat also chimed in, explaining, “I would be much less upset about concession if it were optional, but it’s mandatory. They provide you with a service that you don’t need or ask for and take up to 30 percent for it. I’m sure they will say it’s to pay the vendor's wages, but if a band plays Brixton (4,900 capacity) and sells £20,000 (roughly $25,000) worth of merch then the supporters do another £5,000 (around $6,000) then that’s a MINIMUM of £5,000 taken from the venue. Are they paying the vendors £5,000 ($6000-ish) for that show? Behave.”
Serena Cherry of Svalbard and Noctule also had a similar experience, which resulted in no merch being sold at one of her shows. “We did not want to increase our merch prices for that show because that's not fair to fans who want to buy stuff. They shouldn't have to pay extra because of the venue.”
Russian Circles, Igorrr, and a growing number of artists now feel they have to refuse to sell merch at shows.
“Everything we do exists on a slim profit margin,” explains Lucas Woodland of Holding Absence. “It’s always been high risk, high reward with our band, and this 20 percent cut is the difference between us making a slight profit on a tough tour and making a loss.”
Inside The Industry - We Ask Industry Insiders and Professionals About Merch Cuts
We’ve asked the bands, but we also sat down with alumni of the industry – from managers to touring crew, people who work behind the scenes day-to-day – to get their perspective on how this process operates.
LA Rodgers has been touring as a photographer, manager and merch seller since 2018 and she says, “I’ve seen artists hand over more money in a merch cut than they made in their guarantee that night [a guarantee being the amount a venue promises to pay a band to perform]. I’ve had merch cuts waived because I bonded with a merch rep over a certain sticker on my Pelican case. Sometimes merch reps will come up to you at the beginning of the night and just say ‘Don’t worry about the cut.’ It’s truly a shot in the dark.”
Another source — who wished to remain unnamed in this piece — is well-established in touring and artist management and was able to inform a lot of behind-the-scenes knowledge with their years of experience. For them, this is nothing new.
They did, however, say the perception of merchandise rates changing a lot over the past six months and the conversation becoming more regular leads them to believe change is on the horizon. Their input correlated to a lot of what Rodgers says, that these rates are not a one-size-fits-all and that rates are subject to change depending on factors, such as if the promoter owns the venue, if the venue is owned independently, if there is a third-party owner, if the promoter strikes a deal with the venue.
Moreover, our source explains that just as artists struggled around the pandemic, the economics around a nightclub is not great, especially for grassroots smaller venues. They need to keep the lights on, and following almost two years of an economically debilitating pandemic, venues and promoters may still be recouping their losses.
It appears this issue is not one relegated to the rock and heavy music front. In December 2022, American Aquarium frontman BJ Barham took to Instagram to “shed light” on what he believes to be unfair practices, “We’re pulling this stuff out of the shadows that we don’t think is fair.” However, he did argue larger venues that offer count-ins, merch sellers, and prime spots to sell said merch have “earned” that money.
This issue is one felt throughout the entire industry, across all genres, and continents. U.K. artist Little Simz, who boasts 2 million Spotify monthly listeners, had to make the tough decision of cancelling her 2022 fall U.S. tour, citing financial incapabilities of touring with the current U.S. touring model. “Being an independent artist, I pay for everything encompassing my live performances out of my own pocket and touring the U.S. for a month would leave me in a huge deficit. As much as this pains me to not see you at this time, I’m just not able to put myself through that mental stress.”
Variety reports the band Wednesday, who have almost 500,000 monthly Spotify listeners, also shared insight into the cost of touring last March that left their fans gobsmacked.
Rallying a consensus from artists who’ve spoken on this issue, it appears that merchandise cuts is just the tip of the iceberg to a wider issue of industry inequalities that are even calling for government intervention, in some cases.
Canadian bedroom rapper Rollie Pemberton, also known by his stage name Cadence Weapon, made waves with his articles in Toronto Life about the contemporary realities of touring that caught the attention of the Union Of Musicians And Allied Workers, who joined forces with Rollie to raise awareness with the campaign #MyMerch.
He explained to Loudwire, “We've had around 135 venues and festivals across North America sign onto #MyMerch and pledge that they won't take merch cuts. I just had a meeting with CIMA (Canadian Independent Music Association) about them potentially helping with the cause and reaching out directly to venues that might be interested in signing on. I would love to see more equity for artists in the music industry in general. We aren't seen as workers in the traditional sense, so we don't have the same protections. I feel the merch cut situation is just a small part of a larger struggle that will be ongoing.“
Across the pond in the U.K, Featured Artist Coalition’s CEO David Martin said merchandise cuts feel “perverse” to fans. “We speak to artists who’ve had this issue since the ‘80s and ‘90s.” Featured Artist Coalition worked alongside the Union Of Musicians And Allied Workers to launch the 100% Venues directory, helping artists find venues that give 100 percent of the profits from merchandise to artists, as David says, to highlight good practices from venues. “Our campaign initially launched to oppose punitive fees, we don’t actually believe venues should be out of pocket for providing the ability for artists to sell their merchandise. It’s a complex issue. If the artist is selling their merchandise in a 1,500-cap venue, that’s not costing the venue anything. If the artist is in an arena with 30 staff selling their merchandise, there is a cost to that.”
Loudwire did reach out to a representative from Live Nation for a comment on the reason why merchandise cuts are taken, what that money is used for, and if there’s been a change in the percentage of fees taken pre vs post-pandemic, among other questions pertaining to this piece. They did not comment at the time of this article being published.
Why is the Merch Cut Conversation so Prevalent Now? Pre vs Post-Pandemic
Artists' perspectives on this matter have offered greater clarity and transparency on a conversation that has typically been designated to industry spaces only. Now musicians are taking to the stages and their global online platforms to highlight how this is affecting them. Because of this, we’re seeing this conversation reach new heights, including the U.S. Senate following soul-pop artist Clyde Lawrence’s testimony made to Congress.
“The music industry — for the musicians — is not a very profitable career path,” says Lucas Woodland. “I think a lot of us are realizing now that 20 percent going to a venue is the difference between us making rent. Which is, honestly, very bleak. I also view this as a post-covid thing. Maybe I’ve been naive to it, but it feels like a new problem in the industry, and therefore the camel's back hasn’t quite yet snapped.”
Whatever the answer is, on an artist's front, it’s quite daunting to speak out against an industry that you rely on. As Gautier explains, “I didn't feel comfortable putting this thing out loud, I like to keep Igorrr as much musically focused as possible as it's the one and only purpose of the project, so, getting out of this field was a bit difficult for me. The situation has become so unfair and impossible that bands are now forced to act and to fight against this mafia to survive.”
Artists, such as Craig Reynolds of Downbeat Podcast and Stray From The Path, and Dan Searle of Architects, have used their public social media platforms to stress their concerns with this issue.
When asked to comment on his personal stance for this piece, Reynolds said the following: “I just wish Saudi Arabia had bought a $500 million stake of my company during the pandemic, so I could buy more venues, too.” This is in reference to reports alleging that Kingdom of Saudia Arabia purchased $500 million stake in Live Nation in April 2020, though it is unclear how this financial influx has since influenced their business model and operations.
What Do Venues Say About Merch Cuts?
Loudwire reached out to venues across the board, but despite this, only a few were able to chat with us due to concerns about the implications it may have on them.
Camden’s Underworld, a staple for live music and events in London, U.K. that bands will make a global hotspot for worldwide touring, was able to give their perspective.
“We at the Underworld believe that the artist should take 100 percent of the merch money as it is the lifeblood of a touring artist,” a representative for the venue says. “It's pretty expensive between staff costs and rising energy prices. We have seen the costs of opening the venue rise drastically but that shouldn't be the artist's problem.”
Another independent venue in East London, U.K, Troxy, voiced their opinions on the matter. “We’ve been open as a live events venue for the past 17 years and we’ve never once questioned whether we should be taking a percentage of merch fees. As an independent venue that doesn't have any sponsors or partners, we understand what it's like for bands who are mostly self-funded.”
“Whatever the answer is, I don’t want it to be harder for artists”
Resolutions and solutions: how can we make them happen? With this issue coming to a head, fans are asking what is the best way they can support artists. Artists are asking how they can work with this ongoing influx of rates. Venues want to know how they can maintain a good standing relationship with their artists.
Some musicians are taking matters into their own hands. Don Broco and Trash Boat have partnered with independent venues in the U.K. to offer fans an intimate, once-in-a-lifetime experience to hang out with their favorite bands in a coffee shop or a pub before the gig and buy merch.
“The initial idea came from frustration,” says Tobi Duncan of Trash Boat. Despite that frustration, the positive response from fans showing up has been an “honor” for the band. “I remember waiting by merch tables for band members to come out since the first show I ever went to, I’m honestly just honored that I get to provide that feeling for someone else!”
While some bands are onboard to sell merchandise ahead of the show, or even have a QR code so it can be directly shipped to your house from the event, other artists are concerned that this might cause added stress for artists.
Noah Sebastian of Bad Omens explained in a recent podcast interview of the dilemmas of trying to find a solution requiring bands to work harder than they already are. “[Having] a code at the merch table for people to just buy online, or buy online in advance and get it at the show – It’s kinda missing the point. It’s making it more difficult for us. Whatever the answer is, I don’t want it to be making touring logistically harder for artists. It needs to change at the venue, at the managerial side, at the booking agent.”
[Editor's note: The author of this article is a host of the above podcast]
Lucas Woodland adds, “It shouldn’t be this hard or contentious for people to support their favorite bands. I think we’re a little scared, to be honest. I don’t want people to have to pre-order, I don’t want people to have to trudge across the street and miss the headliner. I am grateful to all the bands trying to reinvent the wheel right now, but we’re still a little far away from those decisions, ourselves.”
LA Rodgers argues, “Venues can sign petitions all they want to say they won’t take a merch cut, but it really comes down to the promoters who actually make and negotiate those deals. Venues can have independent promoters book shows who just pocket their merch cut for extra cash, the venue could have no idea.”
What do you think?
We asked you, the fans, to voice your opinions. This is what you had to say.