The Music Industry’s Merch Problem

Spending $75 on a hoodie at a concert feels absurd, and quite frankly, it is. But you shouldn’t blame the artist.

Spending $75 on a hoodie at a concert feels absurd, and quite frankly, it is. But you shouldn’t blame the artist.

For a long time, venues have been skimming a percentage of artists' merchandise sales—jeopardizing whether they get a meal or hotel room that night. The cut often puts touring artists in the red, and many are lucky to break even. Chances are, if the price of a hat at a show raises your eyebrows, the merch cut that night is probably quite lofty.

Venues will typically take between 10-40% of merchandise sales, even though the artist is responsible for designing, transporting, and typically selling the items. Venues believe that because they give artists a dimly lit corner to peddle goods to the fans who are bringing business to the venue that night, they are entitled to a percentage of all those sales.

Adding that ingredient to the already nasty cocktail of inflation, venue consolidation, dismal earnings from streaming services, and the costs of putting on a tour have left small and mid-tier artists struggling to stay afloat.

- PJ Evans


Written by Max Clarke (Cut Worms)

This is a topic which is thankfully seeing the light of day more and more lately. I’ve seen other artists talking about it and explaining things probably better than I can, but essentially, it comes down to this: Selling merch is basically the only way musicians can make money, and one of the main reasons for touring, and also what makes touring itself possible. Most musicians can’t make anything approaching a livelihood off record sales anymore, and it’s common knowledge now that streaming numbers don’t exactly equate to a livable pay rate either. So unless you catch lightning in a bottle with a publishing sync, going on tour and selling T-shirts is pretty much your only way to make money. For venues or promoters to take a cut of that doesn’t make any sense. They have nothing to do with the design, production, transport, or sale of band merchandise. They claim that they provide a place for people to buy and sell, but the whole impetus of that place is for groups to play music there. No such place would exist if there weren’t groups to bring people out. So by this logic, as others have said, if a venue can take a merch cut, then a band is, by the same token, exactly as entitled to a cut of the bar sales because no one would be buying drinks at an empty music venue.

In the past, I’d only seen merch cuts at really big venues, when I opened for bigger acts. Even then, it felt unfair for them to take money from us for something that has truly nothing to do with them, but because it was this big venue, you felt you had to go along with it. Now even the lowliest dive venues are coming out to stake their claims of artist merchandise profits. It’s like a big bully taking your money and then his scrawny little weasel sidekick sees your hands are tied, so he comes up and takes your money, too.

I’ve been dealing with this same mentality more or less my entire adult life in creative fields — whether it’s music performance, graphic design, or illustration — being expected to work for little or nothing. Countless times, I’ve heard the ever-popular consolations, “It’s good exposure,” or, “It’s not really work for you because it’s what you like to do.” So by this logic, if an accountant has a natural affinity for and ability to deal with numbers, do we ask them to work for free because it’s what they’re good at? Do only people who hate their work deserve to be paid?

It’s really just more of the same thing that we see in every single corner of capitalism — which is doing what it’s designed to do: serve those on top. CEOs and people in the highest positions look to make as much money as possible for themselves with no regard for who does the legwork or makes the actual wheels of the machinery turn. They do it because they can get away with it and they know it.

click to play video

Not to wax political, but we see the same behavior in Congress and our government more broadly. We expect those who hold all the cards to (inexplicably out of goodwill) vote to take power and money away from themselves. It’s why we’ll never see the enactment of legislation imposing congressional term limits or preventing lawmakers from trading stocks.

We are left having to pray for some “good” rich person savior to just do the right thing unprompted, for which we will shower them with praise — even though it usually only amounts to little more than a symbolic victory or PR win.

It’s wonderful that well-meaning people like Willie Nelson will try to help by teaming up with a Live Nation or [insert company here] to form an initiative or program designed to help the little guy. It usually looks great on paper.

But the company always finds some loophole, leaving the artist in the lurch: “We played a Live Nation EVENT, but it wasn’t a Live Nation VENUE, so they still took a merch cut, and we weren’t eligible for any of the stipends, or assistances, or what have you.”

The worst part is that, ultimately, the amount of money they take from us probably means next to nothing to these huge companies. A $175 cut of our sales is a microscopic decimal point on a spreadsheet to them, but for us, it is meals, and gas, and a place to sleep.

I’m sure the venues themselves are also being squeezed from the top down, and the blame can’t be laid solely on them. And the reps who work for these companies are usually nice, well-meaning people. There’s never anyone to blame. But it still doesn’t seem right to pass these costs on to the bands who provide the service and for bands to then have to pass them on to people who just want to see a show and maybe buy a T-shirt without blowing their savings for the month. I don’t know what the answer is, but I’m sure we can figure something out that’s better than this.

Max Clarke is the singer-songwriter of the Brooklyn-based band Cut Worms.