In early March, when the British post-punk band Dry Cleaning played the O2 Forum in London, ticketing company Dice informed fans that, counter to usual practice, no merchandise would be sold at the venue. Instead, a pop-up merchandise store would be operating at the Abbey Tavern, a nine-minute walk away.
With live music returning after almost two years of shutdown due to the pandemic, artists have never felt the pinch more. Often, merchandise is one of the few ways they can turn a profit on a show. But with Academy Music Group (AMG) venues such as the Forum taking a 25% cut from merch sales, their profit margins are being squeezed ever tighter.
“A 25% commission rate is quite a hit to take on merch sales, and it doesn’t feel justified or transparent where that money is going,” says Helena Watmuff from Candy Artists, which manages Dry Cleaning. “Unfortunately it wasn’t an option to lower this, so we let them know that we would be looking at alternatives to selling at the venue.”
This proved to be a deft move. “We probably sold the same number of units, but as we were able to retain 25% it worked out better for us financially,” says Watmuff.
A Guardian investigation has learned Universal Music Group (UMG) – the largest of the world’s three major record labels – is also taking a share of AMG’s profits from the sales of merchandise.
AMG runs multiple venues in cities around the UK such as Birmingham, Bristol, Glasgow, Leeds, Leicester and Manchester as well as the O2 Forum Kentish Town, O2 Academy Brixton and the O2 Shepherd’s Bush Empire in London.
UMG confirmed that the merchandise stands at some or all of these venues – it would not specify how many – are outsourced to a longstanding company called Concessions Management International Ltd (CMI) which sits within Bravado, the merchandise division of UMG.
When an artist sells merchandise at these venues, 25% of the gross revenues go 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 revenues. A spokesperson for the label would not comment further.
AMG declined multiple opportunities to comment.
Campaigns such as #BrokenRecord have argued that musicians and songwriters are losing out in the modern streaming business. For many years, it was presumed that live performing was where acts could make a living even if their streaming revenue was slight. Venues taking a cut of acts’ merchandise sales has been a longstanding problem behind the scenes – with artists and their managers fearful of criticising an influential UK venue operator – that has finally has gone public in recent months.
After Charlatans frontman Tim Burgess tweeted in December about the perceived inequities of venues taking a quarter of merchandise sales, the Featured Artists Coalition (FAC) – the UK trade body representing the rights and interests of musicians – set up a public Google Doc titled “100% Venues” listing venues that waive commission.
Many of those named on the database are grassroots venues with a capacity of 100-200 people, but it also includes venues with a capacity in excess of 1,000 – such as the Pavilion in Colwyn Bay, the Boiler Shop in Newcastle and the Barbican and the Troxy in London.
“It is quite simple from our side,” says David Martin, FAC chief executive officer. “We’ve always been against punitive commission fees being charged for artists to sell their merchandise.”
Acts are now taking direct action and pulling merchandise from shows at venues that take a cut. British musician Aluna Francis, formerly of AlunaGeorge, says the delicate economics of live music rarely add up, which led her to stop selling merchandise on tour.
“A venue has its own turnover of physical goods that will bring cash in,” she says. “You’ve got the alcohol and the door. That’s measurable and reliable. It feels like creaming off the top of the money generated from merch because you’re holding the artist to ransom.”
Those in the live music business accept that venues also struggled in the pandemic but feel that a significant lowering of the concession rate would be the optimum, or even an interim, solution.
Some venues have used the problem as an opportunity to poach acts from rivals: the agent for one major international act recently booked them into an outdoor stadium, rather than a competitor venue, because it offered zero commission on merchandise sales.
But many are unwilling to negotiate. Martin said that assorted venues had stonewalled FAC letters asking to discuss the problem as a matter of urgency.
“We’ve had at least one response which said, ‘You don’t know how venues work at this size,’” he says. “I would level the same argument to those venues: you don’t know the cost of putting on a show in your large venue for an artist.”
One major agent echoed Martin’s experience, saying that any attempts to raise it with venues are immediately shut down. They suggest that venues lowering their cut, rather than removing it completely, could be acceptable, as could a one-off fee per show.
They described the attitude of such venues as: “‘If you don’t want to sell your merch, then don’t sell your merch.’ That feels like cutting off your nose to spite your face as 10% of something and merch at a reasonable rate is better than 0% of nothing.”
