Ah, the concert T-shirt — that pricey memento of the show you just saw with a thousand of your closest sweaty friends. Some people buy them religiously; others steer clear of the merch counter. But what does that T-shirt (or hoodie, hat, sticker, tote bag, record or poster) mean to the artist? How much do bands make from merch, really? What about smaller artists — now that musicians earn so much less from their actual music, is that T-shirt vital to an artist’s survival?
How much do bands make from merch, then?
Unfortunately, it’s impossible to say because it varies so widely. Some artists push it harder than others (the Grateful Dead and Kiss immediately come to mind). “Ideally an artist should be pulling a good percentage of their revenue from merch sales, but the fact is that not every artist maximizes that,” Ferrer says. Some artists she works with are really focused on it, often posting and promoting it on social media — especially nowadays, as live shows as we know them are mostly impossible to put on.
But how much can an artist make?
A big one can make a lot (the L.A. Times estimated 20 years ago that the Grateful Dead bring in more than $70 million annually). But for emerging and DIY artists? One musician that Ferrer works with who pushes her merchandise pretty hard made about $20,000 last year — which, Ferrer says, is a lot of money for three months’ worth of shows in smaller venues.
So merch is a lifeline for smaller artists?
Ferrer believes it is, and that’s another reason 2020 has been perilous for artists. “Eighty percent or more merch sales occur at the live show (prior to COVID) and that’s simply because the artist-fan connection is strongest there,” she says. “Fans are engaged, they’re psyched, it’s an impulse purchase. Without shows, it becomes a lot more difficult.”
Ferrer offers another eye-opening way to look at it. “It takes around 3,400 streams on Spotify to make $15,” she says. “You can make $15 selling one shirt. So if you amplify that math, it’s kind of silly when artists aren’t trying to make the most of that revenue stream.”
How much does an artist get to actually keep from every sale?
Every situation and arrangement is different, and as you can imagine, there are a lot of ins and outs, and a lot of fingers in the pie. Artists will tend to make the most money from merch if they’re dealing with it all themselves, handling the screen printing, etc. Ideally, Ferrer says, the artist should make two-and-a-half times what they’ve invested — they could get a shirt for six bucks and sell it for 25. But it doesn’t always go that way.
Because merch sales happen all different ways! Artists can, of course, do it themselves and take delivery of the merchandise, or they can hire companies to make and/or sell for them. And as you go up the ladder, there are many more layers! An artist’s manager often takes a cut. The venue will often take a cut. Sometimes even the record label, as part of what’s called a 360 deal, will also take a cut. That’s why the merch counter for a big artist playing an arena or stadium is selling T-shirts for, say, $45 or more. There are lots of people in the pipeline before the artist gets any money from it!
How much does each of these people get?
For non-touring merchandise, Ferrer has seen indie labels that will sometimes require their artist to give them the designs, then the merch is sold on the label’s website or through a place like MerchNOW, and the label gets to keep 50 percent (while MerchNOW keeps 20 percent). It doesn’t leave a lot for the artist!
Apart from those arrangements, an artist’s manager tends to get the same percentage of revenue (around 15 percent) from merch sales that they do for every other revenue stream. Venues can take around 30 percent of merch sales, which they justify by providing the platform to sell it. Venues starting at theater size tend to provide their own staff to work the merch counter — in fact, they’ll often just take over the handling of sales.
What’s the best thing I can buy if I really want to support an artist?
“If you had to pick one item where an artist can really just put some money in their pocket, the T-shirt, I think, is the best way,” Ferrer says — it provides the best return on investment for an artist when factoring in the need to keep costs down. Tote bags also have great ROI, she says. Hoodies have a lower ROI because they cost more to make. Hats can be good, though it depends on how much the artist has to pay for them.
Volume is a factor, too. The more an artist can buy of anything in order to sell it, the cheaper it is — but of course they have to have an audience for it!
What about music? Vinyl, CDs or digital downloads?
Vinyl can cost a bit to produce, but in order to compare apples to apples, we gotta factor in the cost of making music. And it can cost an artist, say, $20,000 to record and put out music. So getting a return on that investment takes a while, Ferrer points out.
What item actually sells the most?
According to atVenu, the answer is probably no surprise: It’s the black T-shirt.
Who buys the most merch?
Hard to say, but it’s probably Boomers and Gen-Xers. For one thing, they have more purchasing power than younger generations; their generation’s bands that are still touring — the Rolling Stones, for example — duly clean up in merch sales every time they tour. (Another unlikely example of a Boomer band that rakes in the merch revenue, according to Ferrer, is the Zombies; she knows the band’s manager). A second reason is that the money used to buy merch at shows for younger people is often provided by this same over-40 crowd to their kids.
So, artists are really suffering this year?
Yeah — in a perfect world, musicians could just pivot to merch sales until live music comes back, but with so much unemployment, people have less disposable income to buy that T-shirt. And, of course, that artist-fan connection at a live show is impossible to replicate, even with livestream concerts.
But if you want to support your favorite artist this year, spending a bit on their merch seems a good way to do so. “It’s always been the low-hanging fruit, especially at live shows, to bring in some money,” Ferrer says. “But now is when there needs to be a more concerted effort [by an artist]. It’s money that’s just sitting out there on the table, for an artist who has a loyal fan base.”
So even though you don’t need to buy the T-shirt online to replace the sweaty, beer-soaked one you wore to the show, your favorite artist will no doubt be grateful for your purchase.