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US venue owner axes merch commissions following artist’s testimony in Congress
By Chris Cooke | Published on Thursday 26 January 2023
The US-based Ineffable Music Group has announced it is axing merch commissions at the ten venues that it owns and/or operates following the testimony of Clyde Lawrence earlier this week as part of the Congressional hearing on the ticketing market. The decision comes as merch commissions in the live sector become all the more controversial within the artist community.
Lawrence was the one music-maker who testified at the hearing convened by the US Senate Judiciary Committee which was focused on all things ticketing, being organised in response to the issues that occurred last year when tickets for Taylor Swift’s upcoming American tour went on sale via Ticketmaster’s Verified Fan system.
Much of the session dealt with the dominance of Ticketmaster and its owner Live Nation within the ticketing and wider live industry, though Live Nation itself tried to skew the conversation towards the need to better regulate ticket touts.
However, Lawrence used his testimony to talk more generally about how artists interact with the live business, and the various issues they have to deal with along the way, some of which are arguably exacerbated by the dominance of Live Nation/Ticketmaster.
Among the issues that Lawrence raised was the common practice of venues charging a commission on any merchandise an artist sells on their premises.
He told the Congressional committee: “The argument is that the venue is providing us the retail space for us to sell our merch. Sure. But we’re providing all of the customers, and yet receive no cut from their many ancillary revenue streams. Live Nation getting around 20% of our gross merch sales while we get nothing on ticketing fees, bar tabs, coat checks, and parking passes doesn’t make a lot of sense to me”.
Venues charging a commission on merch sales has long been a gripe among the artist community, but it has become a bigger talking point since shows resumed following the pandemic.
With the costs of touring surging, many mid-tier artists who could previously make a profit from playing live are seeing their profit margins on a show disappear. That makes merch sales all the more important to ensure a tour is commercially viable. Which makes having to hand over a chunk of those merch revenues to the venue all the more annoying.
In the UK, the Featured Artists Coalition launched its 100% Venues campaign urging venues to axe merch commissions and publishing a directory of venues which don’t take any cut of an artist’s merch income. Many grassroots venues never took a merch commission to start with so could immediately list themselves in that directory. For bigger venues, in many cases it requires a change in policy.
The FAC’s 100% Venues campaign expanded to North America late last year via an alliance with US-based Union Of Musicians And Allied Workers and rapper Cadence Weapon. And Lawrence’s high profile testimony earlier this week may have provided a good boost for that campaign.
Thomas Cussins, the CEO of the Ineffable Music Group – which has an artist management and label business as well as running venues – says he started phoning around the venues his company owns and/or operates to axe their merch commissions after watching Lawrence speak in Congress.
He told Billboard that the move will likely cost his company “several hundred thousand” dollars per year in lost revenue, but that he “hopes to make it up via a healthier concert ecosystem”.
He added: “We are on the ground and hearing from artists every day. We are seeing how much the costs of everything have gone up – from buses to hotels to flights. Any action we can take to help to ensure a healthy, vibrant concert ecosystem is important. This industry only works if artists of all levels are able to afford to tour. When artists are able to tour sustainably and fans can afford to buy a t-shirt because the all-in ticket price is reasonable, everyone wins”.
The venues owned and/or operated by Ineffable are mainly in California, including the Ventura Music Hall in Ventura, The Catalyst in Santa Cruz, and the Felton Music Hall in Felton, though it also operates The Chicken Box in Nantucket, Massachusetts.
