American Aquarium sells mostly prosaic items at their merch table each night, including T-shirts, tour posters and records. But fans of the alt-country band will also spot one random outlier: A $5 red and black beer koozie that reads “fuck your merch cuts.”
That item is personal for the band’s founder and lead singer BJ Barham alongside thousands of touring musicians who’ve criticized venues that take a cut of the revenue from their merchandise sales at their shows (even if they feel the venue hasn’t done much to deserve that cash).
“It’s frustrating because for the longest time, the consumer thought the purest way to support their favorite artist was to go the merch booth at a show at the end of the night and spend $20 on a T-shirt, knowing good and well that $20 was gonna go in the gas tank or pay for the hotel that night or pay for the meal tomorrow,” Barham tells Rolling Stone.
Merch fees are a standard strategy at venues of all sizes, with artists handing over between 15 and 30 percent of their merch revenue back to the venue each night. At larger scale concert venues like amphitheaters or arenas, the venue oversees several merch booths that makes the fee more justifiable. Some smaller venues have their own reps who work the merch tables too.
But overall, the tax is one of the most hated policies among touring musicians, who argue that many venues can hardly justify that cut other than a spot at the venue for a crew member to hawk shirts and albums. The impact of a merch fee depends on how much they can sell. But for established artists with a healthy merch business, that’s thousands of dollars to give up; for upcoming acts, it’s the difference between affording a hotel for the night or sleeping in a van (or if their tour will even yield any profit at all).
For years, the most vocal artists have been saying the policy needs to go, and they saw a significant development last week supporting that position. Live music juggernaut Live Nation announced it would halt collecting merchandise fees from artists at 77 of its club and theater-sized venues across the country, and artists hope the initiative from the industry’s most powerful corporation will lead to wider spread adoption across the business, and at venues of all sizes.
“This is a practice that needs to end outright, both at Live Nation and everywhere,” Laura Jane Grace, the founder and lead singer of punk band Against Me!, tells Rolling Stone. “It’s a fucking heist to get it to where a lot of the time bands are playing for free. It’s a predatory practice; it feels like you’re dealing with the mob sometimes. It’s always the artist at the fucking bottom of the chopping block, with people trying to get another hand in and take more.”
Grace signed on with the progressive public policy group MoveOn last week to lead a petition calling to expand the end of merch cuts to every venue across the country.
“The merch fees are more and more putting bands in a position of liability,” she says. “Something I’ve seen happening is that because more and more people pay with a credit card on a swipe reader, you’ll be in a position at the end of the night where you don’t even have enough cash to pay a promoter so the promoter then will invoice you. At the end of the tour, you’ve got a list of IOUs where you have to send out money to promoters to pay them back for playing. You can be three weeks into a four-week long tour, and you got three weeks of invoices of fucking venues you owe money to because of your merch you sold.”
Every artist who spoke with Rolling Stone said the policy forces artists to either give in and pay a fee they feel is unjust, or to simply lie about how much merch was sold that night instead.
In American Aquarium’s case, Barham said that for years the band “did our civic duty and lied through our teeth about what we made on merch,” but more recently they started printing out notices displayed at their merch tables to inform fans if the venue was taking merch fees.
They drew significant attention posting one of those notices online at the end of 2022, telling fans that Oklahoma City’s Tower Theatre was taking a merch cut for that night. “In the spirit of transparency, we want you to know that The Tower Theatre will be taking 20% of all merchandise sold tonight. To offset this, we have been forced to raise the prices of all merchandise by 20%. We are truly sorry for the inconvenience,” the notice reads, also telling fans they had the option of buying from the band’s website at the lower price instead.
The notices have been effective, Barham says, adding that over the past year and nearly 150 shows, less than 10 venues followed through with their merch fees even if they were previously specified in the tour’s contract. “I don’t know what that says about your business practice when you’re willing to do it in the shadows when nobody can see it happening, but you immediately don’t want to do it when everyone is watching,” Barham says.
Live Nation’s program, which is also gifting an extra $1,500 to artists playing at the participating venues, has already coaxed polarizing industry reaction. The announcement caused confusion over wording in the release that said that the new program would save artists millions “through the end of the year,” leading some artists and insiders to think it would only last the next three months.
“This is a practice that needs to end outright, both at Live Nation and everywhere.”
Laura Jane Grace
But that end date has not been confirmed, and Live Nation has maintained that the program is open-ended. Several booking agents contacted by Rolling Stone who have artists playing shows at the participating venues both the rest of this year and next year say they hadn’t been given any indication about timing.
While the artists who spoke with Rolling Stone were pleased to see Live Nation announce the steps — alongside questions about the parameters of the deal — their tone was more relief than jubilation given that they felt the practice was unjustifiable to begin with.
And while stopping the cuts at the club level would address the venues where smaller artists who rely on merch sales the most often play, it doesn’t stop the issue for developing artists opening for more established acts at larger venues.
“It’s nice that they’re acknowledging this is a problem but as a touring artist, I’m supposed to celebrate just that I’m not going to get robbed anymore?” says contemporary punk artist Jeff Rosenstock, who spoke out about merch fees on social media last month. “I’m still not clear on the timeline, but It’s sick if Live Nation is actually saying that they’re never going to take merch cuts again at these certain sized venues. I’m curious how it’s going to go. It’s good but it’s a small step in undoing a practice that just should not be happening.”
Regardless, Live Nation is far from the only concert company that uses merch fees, and now that the largest player in the business has dipped its toe into ending the cuts, Barham, Rosenstock and Grace hope it’ll cause a larger chain reaction.
“When Live Nation and AEG started gobbling up the small- to mid-sized rooms — as a person touring for a long time — I did see an increase in the percentages being taken,” Rosenstock says. “You’d like to hope that something like this will set the tone for other venues but I’ll believe it when I see it.”
“Hopefully this adds a lot of pressure,” adds Grace. “it’s why I got behind the petition, to call to expand this. If a shift came as a result of people literally bitching online and complaining about it and talking about it, increase that pressure. Make it really fucking unpopular. I think bands should take a militant angle of this. It should be an all-out war.”
I’m supposed to celebrate just that I’m not going to get robbed anymore?”
Hours after Live Nation announced the program, The National Independent Venue Association, which represents thousands of indie venues across the country, blasted the company’s move as a tactic to flex their power as the market leader and put smaller, less resourced venues at a further disadvantage.
“The initiative announced today may seem like a move to follow the lead of some independent venues. It is not that,” NIVA said. “Instead, it appears to be a calculated attempt to use a publicly-traded conglomerate’s immeasurable resources to divert artists from independent venues and further consolidate control over the live entertainment sector.
Live Nation’s executive vice president of corporate and regulatory affairs Dan Wall responded to NIVA’s comment on X, formerly Twitter. “Artists are asking for support. [The] On The Road Again [program] is about supporting artists,” Wall said. “NIVA members are perfectly capable of providing similar benefits. Many already do.”
As NIVA and Wall referenced, some indie venues had already committed to letting artists keep all their merch sales; Ineffable Music Group, for example, ended merch fees in January after the band Lawrence spoke out about the fees in their statements to a senate judiciary hearing focused primarily on Live Nation and competition in the live music industry.
However, others are operating on increasingly thin margins and, as NIVA suggests, may not have the resources or capital that a larger company like Live Nation does to waive the revenue stream.
“Independent stages, where the majority of artists, musicians, and comedians start their careers, are small businesses and nonprofits,” the organization said. “They are continually facing rising costs, increased deceptive ticketing practices in the resale market, and ongoing challenges following the global pandemic.”
Many smaller venues have said that alcohol sales — the lifeblood of their business — are down and that no-shows from ticket-buyers as well as cancellations from artists are up. As business has been challenging, venues grow more reliant on other revenue streams.
That argument, however, doesn’t seem to land with the artists, who say that if a venue is struggling, it should figure out other ways to make ends meet without dipping into their merchandise.
“Don’t take money from us,” Rosenstock says. “Figure it out. Or if you’re going to take that merch cut then give us a cut of your bar sales. If that’s what you think our relationship should be, then give me a cut of the business that I brought in for you today. It’s not just hard for you. It’s hard for everybody. We’re all struggling. Obviously we’re grateful to play shows but we shouldn’t be ok with being robbed in order to do it.”
Grace agrees, suggesting that venues should instead focus on the negotiated guarantee rather than ancillary revenue like merch cuts.
“It’s a complete lie if that’s what they would say,” Grace says. “You can set an agreed upon amount before a show but not a percentage that will keep on growing as sales go up. Or go from the guarantee. Instead of paying the headlining act $20,000, Pay them $18,000,” she says. “Say ‘we’re sorry, we can’t afford it. We just have to pay you a little less on the guarantee level but you can keep all of your merch.’ That’s all that needs to happen.”
Barham similarly mentioned ideas like a fixed fee on the backend of a show agreement rather than a flexible percentage increase. “I don’t have all the answers. I don’t know if it’s a $100 set merch table fee, or passing that extra dollar onto the consumer in a ticket sale or what. But I can tell you right now: the answer is not robbing the person that you are relying on to bring the people that make you the actual money,” Barham says. “Clubs are keeping the lights on because of bar sales, and guess what? You don’t sell a $10 Miller Lite unless there’s a really shit-hot rock and roll band onstage energizing the crowd.
“Nobody has ever said. ‘let’s go out to this Live Nation music room and have a beer,’” he adds. “The only reason they are there drinking is because of us, and venues refuse to give us a cut of that. Yet they look at us like we’re from another planet when we ask to keep all of the revenue from the merchandise that we designed, printed, transported, shipped, set up, sold and broke down. That’s preposterous.”
From Rolling Stone US