With significant spikes in the costs of touring already crushing bottom lines, merch cuts (aka merch rates) have once again been making headlines as of late. That practice entitles a venue to a pre-agreed upon percentage of all merch sold by an artist in the venue while hosting their concert. 15 to 20% of the gross has usually been serving as an industry standard as of late, though some venues have been known to charge more.
This month has already seen Silent Planet and Cabal take aim at merch cuts, refusing to sell merch at their shows in Milan, Italy and Budapest, Hungary respectively. Instead the two artists opted to throw some free merch from the stage into the audience in protest of the cuts.
As it so happens, The Browning were also playing the Analog Music Hall in Budapest, HUN with Cabal on June 17th, a show which saw Cabal publicly take action as mentioned above. In the below video, The Browning‘s vocalist, programmer, etc. Jonny McBee broke down the numbers that led them to follow suit in not selling merch at that show [transcribed by theprp.com]:
“Today we are going to be talking about merch cuts yesterday at our show in Budapest, we did not sell merch, and I’m going to break it down for you guys, so you can see why you keep seeing this happening with different bands. I’m just going to get straight into the cost of these things. We sell our t-shirts in Europe for 35 Euros. The cost of making t-shirts is rising. The average cost I’d say for just a standard t-shirt here in Europe is going to be about $11 for me to make. Then there’s a 27% VAT tax coming right off the top. So that’s $8 to the government. Then the venue wants to take 20% that’s $7. Then my European manager gets 10% that’s another three and a half dollars.
Just those costs right there take me down to making $4 per t-shirt, and that’s not including me shipping the merch to our facility, that’s not including me lugging the merch around the continent, that’s not including me paying my people, that’s not including me paying for the shirt design, or me paying for the $300 in advertisements I’d spent to get people to the concert.
So, with all of that in mind, had I sold merch yesterday, the venue and the government would make two times more money than I would off of my merch to my fans. Now, the VAT tax is totally unavoidable. There’s nothing we can do about that, but the 20% to the venue is 100% unnecessary. If the venue did not take a 20% cut, then I would have made $11 per t-shirt, which that would have been a fine profit margin for me to sell yesterday. And not only fine, but fair. Whenever any business spends money and time upfront to make a product, there’s a certain expected return to be made on each of those products sold.
$4 a t-shirt is not an okay profit margin. These fees and taxes is one reason why, when you go to a massive festival or a massive show, you see $50 t-shirts, because the bands need to make x amount of money off their t-shirts. A bunch of people always ask, why don’t you just play venues that don’t take a merch cut? The reason is because sometimes you go to a city where the only suitable venue is a venue that is going to demand a merch cut, and it is more important to play our music in that town to our fans than it is to sell t-shirts in that town.
I don’t think it’s fair to the fans to skip over a whole country or a whole city just because we want to sell t-shirts. So it’s more important that we play the show and make less money than just ditching them totally. The only semi-fair thing I could see the venues maybe doing, instead of a percentage off of merch, maybe they could charge us a flat fee to rent the space, they charge a flat fee to rent the venue to play the show.
They could charge us, say, $100 bucks for this part of the wall to sell merch on. That I would deem as potentially fair. The perfect deal. And how most venues operate, we both make money off of tickets, they make money off of the bar, which is their product, we make money off of our merch, which is our product, and it’s really out of principle. I cannot let people that are not involved in my business make more money than the people that are part of my business, off of my fans who think that that t-shirt money is supporting us.
This is an unavoidable thing in some places, and whenever you’re dealing with certain massive companies that run a lot of shows and venues. This rarely happens. It doesn’t really bother me whenever it does. Yes, it sucks to make less money, but the worst thing is that the fans get mad at us. They’re like, ‘Why aren’t you guys selling this stuff? Like, what the heck? I’ve been waiting to see you guys.’ But we do have to protect our bottom line, our profit margin, so that we can function as a band.
Merch is the majority of money that we make, and the venues know it, and that’s why they want a piece of it. What I would do if I was you is the next time you’re at a show, I would ask the merch guy if there’s a merch cut. If the merch guy says there is a merch cut, then maybe that night you don’t go buy anything from the bar, because if they want to cut into 20% of our profits, maybe you should not be giving them 20% of their profits. On the rare occasion where we can’t sell merch, it sucks, but we still love being there and we still love playing the shows for the people all over the world. So make sure you come out and see us on tour, and we’ll see you soon. Okay, peace.”
The Browning‘s latest leg of European touring activities are reaching the halfway point with the following stops remaining:
06/22 Poznan, POL – 2Progi
06/24 Copenhagen, DEN – Copenhell
06/26 Spalene Porci, CZE – Basinfirefest
06/27 Leipgiz, GER – Impericon Festival
06/28 Helsinki, FIN – Tuska Open Air
07/01 Viveiro, SPA – Resurrection Fest
07/04 Collombier-Saugnieu, FRA – Planet Fest
