Last week, I went to see one of my favorite artists, Theo Katzman, play the Wiltern Theater in Los Angeles. Theo, who I recently featured on the New Music Business podcast, is a completely independent artist — no label; no manager.
I wanted to avoid the exorbitant service fees tacked onto the tickets when purchasing online, so I showed up to the Wiltern’s box office the moment it opened on show day to snag (what I thought would be) a $30 “face value” ticket. However, when it came time to pay, the clerk told me that it would be $35. “There’s a $5 per ticket service fee added” she explained. I asked her, “How can I avoid the service fee?” She replied: “You can’t.”
I was confused and disappointed as to what “service” the Wiltern was providing by selling me a ticket at their physical box office. The ticket wasn’t even printed. They texted it to me.
There’s been a lot of discussion around the excessive fees tacked onto tickets these days.
On April 7, Maggie Rogers held what she called “Box Office Day,” where fans could show up to venue box offices, in person, and snag tickets before they went on sale online to avoid some (but notably not all) of the fees. (Maggie was even at the New York City box office location to help facilitate the ticket purchases and say hello to fans).
I spoke with Maggie’s manager Jonathan Eshak about Box Office Day and he discussed a bit more of the reasoning behind the stunt: “This is not an anti Ticketmaster strategy,” he professed. “If there is a way that we can make sure that we’re creating an environment for her fans and her community to get as affordable a ticket as possible — and a legitimate ticket — then we wanted to provide an option to do it. We wanted to at least express to her fans that she is hearing them and she wanted to be part of a small solution to a problem.”
Clyde Lawrence of the independent soul-pop band Lawrence, testified in front of the Senate Judiciary Committee this past January about the “lopsided deal mechanics in certain aspects of the live music industry.” Specifically, how Live Nation owned and operated venues take so many of the venue and promoter expenses off the top before calculating the artist’s pay, but the artist doesn’t get to deduct any of their expenses. “If they want to take 10% of every ticket and call it a “facility fee,” they can (and have); if they want to charge us $250 for a stack of 10 clean towels they can (and have).”
Lawrence continues: “But it’s not just the fact that we have no say in the Live Nation’s promoter’s costs that are paid to a Live Nation venue, perhaps the most frustrating part is that practically none of our touring costs (our crew, travel, accommodations, or insurance, to name just a few) are covered. If profit is defined as revenues minus costs, then the number Live Nation presents in the settlement sheet as the show’s “profit” is actually not a profit for us at all, because unlike them, we still have all of our costs to deduct.”
I spoke with Theo Katzman’s booking agent Tom Windish (who also represents Billie Eilish, alt-J and Tove Lo) and Trey Many (who represents Beach House, Lord Huron, Death Cab for Cutie and Fleet Foxes), both of Wasserman Music, about today’s artist deals. When asked if agents can ever strike the expenses from the settlement, Many explained, “Absolutely. Yes. It just depends on the size of the room and what the artist wants. Because on one hand, we want to make sure that the artist has everything they need for the show when they arrive. But on the other hand, they don’t want to pay extra for all the stuff that they don’t need. We want to verify these expenses.”
But the fees that agents are less successful at removing are merch fees. Most venues take a 10% to 40% cut of the artist’s merchandise sales. I’m sorry, but this is insane. The artist doesn’t get to share in any of the revenue that the venue makes from the bar, kitchen, coat check or parking — or those “service fees.” But the venue gets to keep money made from merch? And fans wonder why shirts and mementos cost so much at concerts.
Well, here’s the deal. The margins on merch are not that great. An artist might make 30% profit on a T-shirt sale (not to mention the opportunity cost of people’s time it took to design the merch), but if the venue is taking a 30% cut of merch, then the artist actually is losing money by selling merch. So the artist can either mark up their merch items (in effect upsetting their fans for charging so much) or take the hit and look at merch as simply a promotional item.
Eshak revealed “We’ve done the math at our company. We’ve paid hundreds of thousands of dollars on multiple clients to just venues on merch fees. And then you look at the P&L at the end of the day and you’re like, ‘Was the time spent on this even worth it?’”
I believe it’s unethical for a venue to take a cut of the artist’s merch.It’s a shameful practice and every agent should push hard to remove merch fees. Artists need every last dollar to survive on the road.
Fortunately some venues are doing away with merch fees. Ineffable Live, which runs 10 venues including the Golden State Theater in Monterey, CA, the Fremont Theater in San Luis Obispo, CA, and the Chicken Box in Nantucket, MA, got rid of their 20% merch fee following Lawrence’s testimony.
The tour merch tracking platform and POS system AtVenu told me that the average spent per head at 500- to 1,000-capacity venues is $3.65. Meaning, if 1,000 people attend the show, you can expect around $3,650 in merch sales. However, I spoke to managers who say their artists sometimes make upwards of $8 per head in merch sales.
Many touring bands playing mid-size clubs might bring in $10,000 a night in merch. If a venue skims 20% of that, that’s $2,000 a night that the artist is losing. On a 50-date tour this could be $100,000 that the artist missed out on. And we’re not talking superstars here. We’re talking hard-working, indie bands just trying to make a living.
Back at the Wiltern, Theo Katzman and his band put on an incredible show. I decided to buy a hat at the merch booth and was surprised that after I tapped my credit card a tip window popped up on the screen (the kind you see at coffee shops). I asked the merch seller (who worked for The Wiltern) who the tip was going to, the band or the seller, and she said it went to her, the seller.
Everyone is skimming off the top of artists and it’s disgusting.
There is no universe where merch sellers should be making tips from the artist’s fans. If anything, those tips should be going to the artist!
If promoters and venues continue to shake down artists for every last dollar, the live concert business will crumble. Live Nation made $16.7 billion in 2022, while many artists like Little Simz, Santigold, Animal Collective, Sampa the Great, Stormzy, and Gang of Youths had to cancel tours because they couldn’t make them work financially.
I bet an additional 30% in merch sales would have gone a long way.
Ari Herstand is author of the best-selling book How to Make It in the New Music Business, the host of the Webby Award-winning New Music Business podcast, the CEO and founder of the music business education company Ari’s Take and a Los Angeles-based musician.
