In early March, when British post-punk band Dry Cleaning performed at the O2 Forum in London, ticketing company Dice informed fans that, contrary to usual practice, no merchandise would be sold at the venue. Instead, a pop-up merchandise store would operate at the Abbey Tavern, a nine-minute walk away.
With the return of live music after nearly two years of hiatus due to the pandemic, artists have never felt the pinch so much. Often, merchandise is one of the few ways to generate profit on a show. But with Academy Music Group (AMG) venues such as the Forum cutting merchandise sales by 25%, their profit margins are getting squeezed.
“A 25% commission rate is a hit on merchandise sales, and it doesn’t seem justified or transparent where that money goes,” says Helena Watmuff of Candy Artists, who runs the dry cleaning. “Unfortunately it was not possible to reduce this, so we let them know that we would be looking for alternatives to selling on site.”
It turned out to be a clever move. “We probably sold the same number of units, but since we were able to keep 25%, it worked better for us financially,” says Watmuff.
A Guardian investigation has learned that Universal Music Group (UMG) – the largest of the world’s Big Three – also takes a share of AMG’s profits from merchandise sales.
AMG operates multiple sites in cities across the UK including Birmingham, Bristol, Glasgow, Leeds, Leicester and Manchester, as well as O2 Forum Kentish Town, O2 Academy Brixton and O2 Shepherd’s Bush Empire in London.
UMG has confirmed that the merchandise stands at some or all of these sites – he would not specify how many – are outsourced to a long-standing company called Concessions Management International Ltd (CMI) which sits within Bravado, the division of UMG merchandise.
When an artist sells merchandise in these locations, 25% of the gross revenue goes to AMG and UMG, even if the artist in question is not signed to UMG.
UMG told the Guardian that AMG takes “the lion’s share” of revenue. A label spokesperson declined to comment further.
AMG declined several opportunities to comment.
Campaigns such as #BrokenRecord have argued that musicians and songwriters are losers in the modern streaming business. For many years, it was assumed that the live show was where artists could make a living even if their streaming income was low. Venues taking a share of merchandise sales from acts is a long-running issue behind the scenes – with artists and their managers fearful of criticizing an influential UK venue operator – which has finally come to light in recent months.
After Charlatans frontman Tim Burgess tweeted in december on the perceived inequalities of venues which account for a quarter of merchandise sales, the Featured Artists Coalition (FAC) – the UK trade body representing the rights and interests of musicians – has created a public Google document titled “100% Venues” listing places that waive the commission.
Many of those named in the database are basic venues with a capacity of 100-200, but this also includes venues with a capacity of over 1,000 – such as the Pavilion in Colwyn Bay, the Boiler Shop in Newcastle and the Barbican and the Troxy in London.
“On our end, it’s pretty straightforward,” says David Martin, FCC General Manager. “We have always been against punitive commission fees charged to artists to sell their merchandise.”
Acts are now acting direct and pulling merchandise from shows in venues that are taking a cut. British musician Aluna Francis, formerly of AlunaGeorge, says the tricky economics of live music rarely add up, leading her to stop selling touring merchandise.
“A place has its own turnover of physical goods that will make money,” she says. “You have the booze and the door. It is measurable and reliable. It’s like skimming off merchandising money because you’re holding the artist to ransom.
Players in the live music industry accept that venues have also struggled during the pandemic, but believe that a significant drop in the concession rate would be the optimal, if not temporary, solution.
Some venues have used the issue as an opportunity to poach acts from rivals: the agent of a major international group recently booked them at an outdoor stadium, rather than a competing venue, as it offered no commission on merchandise sales.
But many do not want to negotiate. Martin said various sites had closed FAC letters asking to discuss the issue urgently.
“We had at least one response that said, ‘You don’t know how sites work at this size,'” he says. “I would give the same argument to these halls: you don’t know the cost of a show in your big hall for an artist.”
A major agent echoed Martin’s experience, saying any attempts to lift him with sites are immediately shut down. They suggest that venues reducing their cut, rather than removing it entirely, might be acceptable, as could a one-time fee per show.
They described the attitude of these sites as follows: “‘If you don’t want to sell your wares, then don’t sell your wares.’ It’s like cutting off your nose to get upset, because 10% of something and the goods at a reasonable rate is better than 0% of nothing.