As traditional record sales have gone away, selling merchandise is one of the only consistent ways for artists to make money...but it's not easy
I talk a lot about the business of music at Generation Riff because of the changes we've seen in the last 10-15 years, let alone the past 30. They've been monumental, to say the least.
One of the biggest changes, and the most damaging to musicians as far as I'm concerned, is the disappearance of physical record sales. Once streaming officially became the way that most people consumed music, artists needed to find better means of creating revenue.
Though not new, bands and artists selling merchandise at shows and eventually online, have become one of the only consistent ways for musicians to earn money. So when you're at your next concert (applies mostly to bigger bands) and you see T-shirts for $45-$60 and hoodies for $75-$100, you will have some idea why.
That's the simplified version. Some of the reasons why merch has gotten so expensive are as complex as record contracts signed with major labels.
I read an article about country music star, Zach Bryan who had a very interesting reaction to fans of his on social media complaining about the cost of merchandise at his shows.
"I just learned how expensive the merch was last night. A hoodie for $60-$70 is too much and I'm fixing it right now. Thank you guys for being such a good, kind, and rowdy crowd." - Zach Bryan
While I appreciate any artist trying to make things better for their fans, I have a hard time believing that Bryan had just learned of those prices at the time of his quote. The article I referenced was published on 10/28/22 and at the time of Bryan's quote, there were only three dates left on his American Heartbreak Tour.
Having worked my share of merch tables over the years, I can tell you the band and/or management are always aware of their merch prices. At least for the biggest-selling items like T-shirts and hoodies anyway. If the artist doesn't know, it's probably because they've chosen not to.
Merch sales, especially for major artists, are no longer handled by lugging cardboard boxes full of shirts on the bus, assigning a roadie or two to work the table, and away you go. Those days are long gone.
Today, big stars sign contracts with third-party vendors, as well as the venues they play in, to sell their merch, with percentages divided up between anyone involved. It's big business and you'd better believe that everyone gets their cut.
While estimates may vary, artists will typically earn 75%-85% of the revenue generated from merchandise sales. The percentages will differ based on the agreement the artists sign with the third-party vendors and the venues. There are plenty of costs associated with getting the merch designed, created, shipped, packed, and finally displayed at the show. Not to mention the fees and salaries paid to every person and entity who has a hand in merchandise.
It's never as simple as figuring out the cost of the shirt and then listing a price based on how much profit the band would like to make. The economic obstacle course that paves the way from concept to the consumer is full of red tape and multiple layers of cost.
With all of this in place, fans still buy tons of merchandise. Not all of their hard-earned money goes to the band, however. In turn, most bands do understand why the prices are so high but in many cases, this is one of their best forms of income so the line is quite blurry on what to do about it from their standpoint, if anything at all.