Pollstar INT’L: Indie Venues Forgo Merch Cut Under Enormous Financial Pressure

In the beginning of this year, the UK’s Featured Artists Coalition (FAC) launched the 100% Venues directory, which lists venues that don’t charge artists a commission on merch sales. Almost 450 independent venues in the UK have signed up at press time to support artists in their post-COVID recovery. It’s a remarkable commitment, seeing that most independent venues are struggling themselves after having transitioned from a period with no or heavily restricted events to a period of inflationary costs on all fronts. It is also proof of the relationship between independent venues and artists, which FAC CEO David Martin described as “one of the most important partnerships in the music ecosystem.”

Recent press coverage suggested that a lot of independent venues only recently committed to this campaign, making it sound as if artists had demanded it in light of the price hikes. But the reality is, hardly any grassroots venue in the UK ever charged a merch commission. According to data from UK’s Music Venues Trust, which its CEO and founder Mark Davyd shared with Pollstar, “it was a tiny percentage, less than 2%, and those are all either slightly bigger or run in a very specific way as charities with tax liabilities etc., which required them to do it. The truth in our sector is that the campaign has simply thrown a light on how good the grassroots venues already were at this stuff.”

This chimes with what Pollstar has been hearing from the grassroots venues sector. Paul Smith, promoter at New Cross Live, who works with multiple indie venues and handles bookings at the New Cross Inn London, said, “Venues that take a percentage of merch should give artists a percentage of the bar, or do the decent thing and stop. Personally, I’d never be associated with a venue that would even entertain the idea of merch cuts.”

Nina Jackson, music and venue manager of The Half Moon in Putney, added, “We have never charged merch commission here, we just ask artists to bring their own seller. If we organize someone to sell for them, we just ask them to pay that person directly, usually around £10-£15 per hour.”

James Mckeown, head programmer at Brighton’s Concorde2, said, “Concorde2 has never charged a merch commission to any touring artists as it’s our belief that this is a completely unethical practice.” Chris Sharp, owner and director of The Fleece in Bristol, said, “As a venue owner as well as a touring band member I have always taken the position that charging bands a commission on their merch sales is totally unacceptable. Since I took over ownership of The Fleece in 2010, we have had a zero commission policy.”

They all confirmed that charging commission on merchandise was common practice at bigger, corporate-run venues, such as the Academy Music Group as well as a lot of Arts Council-funded and local council-operated venues. Pollstar didn’t hear back from Academy Music Group at press time, but received feedback from Eddie Shelter, senior producer of music at the Barbican Arts Centre in London, who said, “We used to charge 20% commission to artists for merch sales. We decided to change this to zero commission about five years ago and lost around £20,000 [$24,000] per annum income. Our shop agreed to take the hit and has explored ways in which to maximize revenue in other areas of the business.”

Shelter explained why the Barbican changed its stance five years ago: “We felt that, on balance, with the increasing touring costs and expenses facing the types of artists we worked with, it wasn’t sustainable to continue charging commission on the relatively modest merch sales income received by the artists. We felt that by making a stand, we could lead the way in encouraging other like venues or others in the industry to follow suit. We want to stand in solidarity with the artists we worked with to support them as best we can.”

Such a move is commendable in times when independent venues are struggling to make ends meet. Energy costs went through the roof across Europe and the UK. Davyd said price increases faced by MVT member venues ranged from 156% to 646%, with an average of 322%, based on feedback from 52 venues at press time.

“Every venue in our network will ultimately face a rise, it is just a question of when; some are locked into prices through to July next year, others are already in the eye of the storm,” he explained. Sybil Bell, founder of Independent Venue Week, said, “Everyone’s still operating under enormous financial pressure due a range of other factors, from the cost-of-living crisis and rampant inflation to the ongoing uncertainties around Brexit. It’s one of the reasons why we recently launched our Independent Venue Community initiative, encouraging more venues to open their doors in the daytime and expand their customer base through new types of programming.”