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OpEd

Lowest of the Low: When Venues Take a Cut of Merch Sales

On Saturday, my band was playing a show at the “big” venue for local underground bands in Taipei, Taiwan. Playing a show there means your band has “made it,” at least in a purely local sense. It has the best sound system in town, professional lighting, a small but serviceable backstage area—everything you need and a few things you don’t, including a disco ball. It’s where the “big” international extreme bands play—Exodus, Ensiferum, Misery Index, Into Eternity, Destruction, and many more have played there. It has a much maligned crowd barrier in front of an elevated stage, capacity for about 700 people—those things that make a band that might never have played outside their hometown think they can take things to the next level. It also has a common policy that most bands at the next level encounter on a semi-nightly basis: This venue takes a percentage of the bands’ merchandise sales.

In the case of this particular venue, the house takes ten percent of the T-shirt sales, mercifully leaving the CDs and other assorted saleable items alone. The justification behind this is that the bands set up their merch table in front of an apparel shop also within the confines, and this is the only place the venue will allow bands to push their shirts, CDs, commemorative thongs, logo emblazoned vaporizers, and what have you. So, for the privilege of setting up in front of the clothing emporium, the house takes ten points for a product they had no hand in creating, shipping, or distributing. For them, it’s all profit, and the bands even have to sling the shirts themselves. The house literally contributes nothing, and charges a fee for it. Nice work if you can get it.

I know this is nothing new, and that ten percent is actually on the low end of the scale. I am also aware of how venue owners justify taking their cut. They are providing the space for business to take place, and the points they take on the merch sales are their way of charging rent, essentially. Never mind the fact that punters are only spending their money at the venue because the band has come to play. No, not only does the band have to bring in the customers, it also has to pay an additional penance for the right to try and cover at least some of its expenses.

An oft repeated retort to this problem is, “If the venue is taking a percentage of the merch sales, the band should get a cut of the bar sales.” And why not? Again, the people are only coming to the venue and buying drinks because the band is getting up on stage to play their hearts out. Would they come to the venue to stand around in complete silence, stare at an empty stage, and sip their PBRs just for the polite conversation? Unlikely.

It’s so completely obvious, but it bears repeating because this ridiculous practice goes on and on. What can bands do about it? Not much, short of taking shows out of major venues with decent equipment and booking nothing but dodgy D.I.Y. shows in basements, veterans’ halls, and other available public and private spaces. This probably isn’t going to happen anytime soon, though a lot of bands in the grind, powerviolence, hardcore and punk scenes will still book entire tours this way. Bands need the decent equipment, solid sound, and, let’s face it, the recognition that goes along with playing the “name” venues around the world. So, we’re basically left with no choice but to smile and hand over a chunk of cash at the end of the night for pushing our own merch made with our own money sold by our own hand, barring some mass protest. But I don’t see a boycott of the venues that engage in this accepted form of theft happening in the foreseeable future. But start one up, and I’ll be the first to add my name to it. I can see the non-headlines now.

I don’t know about you, but if I were a venue owner, there’s no way I could sleep at night knowing I was ripping bands off like this. Maybe it’s because I know both sides. I know what it’s like to lay out a large amount of money out of my own pocket for a run of shirts in the hopes they’ll sell and the band will break even or perhaps even turn a slight profit, which then immediately gets funneled back into the band for recording, rehearsal space, touring, or making the next round of merch. I also know running a venue is no walk in the park either, but they always get their cut no matter what, whether ten people show up or a thousand, and I can’t say the same for bands. The venue gets paid first, then the promoter, if he or she is lucky, and the booking agent if a band has one, and on down the list we go, and finally any crumbs that somehow manage to filter through are thrown almost derisively to the band. Taking ten percent of those crumbs away after a band has played its guts out; it’s an insult. Nothing less.

Pay to play in any form is just another slap in the face in an industry that leaves those out there chasing even a modest dream with black eyes and broken teeth at the best of times, and this is, albeit indirectly, a form of pay to play. If a venue provides a merchandise person to help with the sales, and gives the band the option of taking it or leaving it, then by all means, charge for the service. But to do absolutely nothing and then shove your hands into the bands’ pockets while simultaneously tapping their veins for those last few precious drops of lifeblood? It doesn’t get much lower than that.

Joe Reviled's avatar

Joe Henley is a freelance music journalist and editor currently living in Taipei, Taiwan. In addition to pulling vocal duty in a death metal band, he maintains a website on the Taiwanese metal scene and writes regular features on the touring bands that come through Taipei for a local monthly music magazine.

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7 Comments on "Lowest of the Low"

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Anonymous Reader
1. Roughhausen writes:

you are fully aware of my feelings about that particular venue and their management.... i bet they got their cut of the merch sales that night yea? I seem to remember the last time I played there it took almost 4 months of phone calls and letters to get paid... hmmmm funny how that works

# Mar 21, 2012 @ 10:28 PM ET | IP Logged Reveal posts originating from the same IP address
Joe Reviled's avatar

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2. Joe Reviled writes:

Yup, they got their cut all right. The house always wins.

# Mar 21, 2012 @ 10:32 PM ET | IP Logged Reveal posts originating from the same IP address
SKMusicJonny's avatar

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3. SKMusicJonny writes:

I know that some venues do this to clear overhead from show expenses. A lot of bands that are coming up and breaking into a regional act or get the opportunity to actually go on the road with bigger acts to a variety of venues, never see that a lot of other promoters, venues and touring companies run things different than the preconceived norm. I know I raised hell when I first came across this same issue at a venue and after looking into it I found somethings are there for a legitimate reason. In this story, that's not legitimate reason for merch points to the house. What can be a legitimate reason usually depends on where the venue is. Some places are in a strict ordinance agreement with a Chamber of Commerce or city, county, local laws which place a vendor's license for products to be sold outside of common ABC (alcohol/beverage) & food sales. The promoter or manager places a charge to the acts for use of this license in a temporary event, where as if a snoopy inspector were to come in and be meticulous, he can pull a performance agreement and show that the vending being done at that time (by a band) falls under the vending tax and license they have (which is paid yearly). They are having you the band help with that license since you are in a way vending and exercising that use on their name. Now some places are a bit different, such as some House of Blues locations where they have a "licensed" product line that they sell. Band sales do take away from their overall product sales so to balance having a band there that depletes gross sales they may pull a percentage to cover loss as most places don't have acts performing in that capacity 7 days a week. (which their sales projections have to be based on). They are offering you a bigger venue at a "household name" with strong marketing ability which equates to a larger sales net (potential) than normal. For national acts it's that way across an entire tour and is part of their "offer sheet/engagement" criteria with a book agent. An agent may pass on a booking because a promoter won't budge on the percentage which can be as high as 20% in most cases and the act is not down for it. Agents have a whole different way of handling this with management/artists that's a different story all together but they too work with it as well. Best advice is to be upfront prior to booking your band. Don't say you're something you're not and build a house of big expectation when you arrive. Be frank and say, " Hey, we are a small act and this is our (first time out, breakout, first time in the area etc..) and ASK the promoter about merch percentages before you roll in. Most will let it roll even if they have requirements, cause they may want you back, others.. well like I said, some are just in it for the profit. They may squeeze what they can because they aren't 100% behind their ability to promote and may have a bad night so instead of taking a loss or losing their 15% promoter profit for their work, they have a buffer with your merch money.. Not a good, honest way of doing business but it's done sometimes. You'll have to weigh the worth of going along against what you gain from that show. If you make $1200 in merch from a show and you kick up %10 well you walk out with $1080, if that's better than making $500 or less at places that don't do it, I don't know about you but I'd take it and accept those terms. Now if you can't do any better in sales with a bigger crowd at your table, that has nothing to do with the venue (cause the crowd is there) you may have to go to the drawing board and evaluate: how you're selling, what your selling, and even who IS selling it. Sorry, I love to rant and go forever but I love this industry and this is one of those niche things I'm all about.
Rock On the sermon is over! HAA!

# Mar 22, 2012 @ 5:47 PM ET | IP Logged Reveal posts originating from the same IP address
SKMusicJonny's avatar

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4. SKMusicJonny writes:

Booking Agents get paid "with" a band in 99% of cases unless the agent is breaking them out or has them on a trial run. The agent's job is to get the band out there and maximize their potential as far as where a band can go. The bigger the better for both and it's a unique relationship between them and the artist. An agent works a band for a "guarantee" if they have what it takes or has shown that they can be worthy of the Agent's time and investment. For the band it falls to the simplest of terms: "Guarantee your crowd, you guarantee you paycheck." An agent has to look at that and determine whether an an act can do that. They don't just sign any Larry Joe and Steve to their roster. --

Once they have an act that has that potential or shows it can be possible, the agent gets them gigs. That's a lot of work and more phone, email, clerical and LEGAL than most people understand. That does need to be compensated and that's where the percentages come in as well. Agent works his end, band does theirs and they prove through performing, publicity and fanfare they can bring a draw. Agent works out a guarantee for them (in addition to the numbers for getting from venue A to venue B) and is the frontline negotiator with Talent Buyers and Promoters. They get 10% usually and that comes from the guarantee they locked in for their client (band). Normal payouts for a show are part of a "Engagement Agreement" or Performance Contract. It has an important part called an offer sheet that precludes it but that's part of the negotiation phase of the booking. This contract, with that offer sheet annotates venue capacity, ticket sale prices Adv & DoS, net gross, gross potential, promoter profit, flat vs. split, but importantly house expenses. That's those sound and light guys, stage hands, security, radio/poster promotion etc, all those things that are "outside" of normal cost to run that business on an average. Those are first paid, then your guarantee for band (which agents get 10% off that not separately) then a talent buyer if there is one which is another 10%, then promoter 15% if that is even there and small cuts (which they are) to the local openers. The reason that is that way is a venue/promoter would almost immediately be out of business as far as getting live bands if they booked a show with a guarantee and didn't pay or I.O.U' ed the band. Blacklisted immediately and no one with a right frame of mind would book with them. So they have no choice but to pay the artist no matter what loss and they are bound to a contractual agreement to do so. Not everyone can be a promoter and it's tough. Fight you a** off and work hard to build those fans, the are the only thing that will get you the guarantee, the eye of good management and agencies, they will build the hype to help fuel you along and that is a powerful weapon in a band's arsenal.
-- dang it I did it again.. HAHAHA my bad.

# Mar 22, 2012 @ 6:12 PM ET | IP Logged Reveal posts originating from the same IP address
Joe Reviled's avatar

Writer

5. Joe Reviled writes:

That's the most detailed insider insight I've seen so far on how the industry works Jonny. Thanks for taking the time to type all that out. Some of it I was aware of, but there's a lot of info in there that is new to me, and I'm sure to others as well. As always, there's two sides to every story, and I guess sometimes it can be the legal wrangles that force a venue's hand in charging a percentage of the merch take.

# Mar 22, 2012 @ 7:54 PM ET | IP Logged Reveal posts originating from the same IP address
Anonymous Reader
6. Ugh writes:

Its just a fact, musicians are not respected by venues, promoters and many others in the business. Just have to be aware and deal with it...

# Apr 9, 2012 @ 11:13 PM ET | IP Logged Reveal posts originating from the same IP address
silvermountains's avatar

Member

7. silvermountains writes:

Great read, I fully support everything stated in the argument.

cheers! \m/

# Apr 10, 2012 @ 8:45 PM ET | IP Logged Reveal posts originating from the same IP address

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