Last week, I went to see one of my favorite artists, Theo Katzman, play at the Wiltern Theater in Los Angeles. Theo I’ve been highlighting recently New Music Business podcastis a completely independent artist – no record label; not an administrator.
I wanted to avoid the exorbitant service fees attached to tickets when purchasing online, so I came to Wiltern’s box office as soon as the show opened on the day of the show to grab a $30 “think value” ticket (I thought this would be it). But when it was time to pay, the clerk told me it would be $35. “A service fee of $5 per ticket has been added,” he explained. “How can I get rid of the service fee?” I asked. He replied: “You can’t.”
I am confused and disappointed as to what “service” Wiltern is providing by selling me a ticket at their physical box office. The ticket was not even printed. They texted me.
There is a lot of discussion about the exorbitant fees attached to tickets these days.
on April 7 Maggie Rogers He held what he called “Box Office Day”, where fans could come and grab the venue’s box office in person before going on sale online to avoid some (but not all) of the fees. (Maggie was at the New York City box office location to help streamline ticket purchases and say hello to fans).
I spoke with Maggie’s manager, Jonathan Eshak, about Box Office Day, and he talked a bit more about the rationale behind the show: “This is not an anti-Ticketmaster strategy,” he admitted. “If there’s a way we can make sure we’re creating an environment for their fans and community to get as affordable a ticket – and a legitimate ticket – as possible, then we wanted to give them an option to do so. We wanted to express what he wanted.”
Clyde Lawrence of the independent soul-pop group Lawrence testified before the Senate Judiciary Committee last January about “the disproportionate deal mechanics in certain aspects of the live music industry.” Specifically, how LiveNation Owned and operated venues maximize most of the venue and promoter expenses before calculating the artist’s salary, but can’t deduct any of the artist’s expenses. “If they want to take 10% of each ticket and call it a ‘residence fee’, they can (and have it); If they want to charge us $250 for 10 stacks of clean towels, they can (and can) have it.
Lawrence continues: “But it’s not just that we have no say in the Live Nation organizer’s expenses paid to a Live Nation venue, but perhaps the most frustrating part is that almost none of our touring expenses (our crew, travel, accommodation) or insurance are covered, just to name a few. If profit is defined as revenues minus costs, then the number that Live Nation shows as the show’s “profit” on its paytable is actually not profit for us at all, because unlike them, we still have all the costs to deduct.
I spoke With Tom Windish, Theo Katzman’s booking agent (also representing Billie Eilish, alt-J, and Tove Lo) and Trey Many (representing Beach House, Lord Huron, Death Cab for Cutie, and Fleet Foxes), both from Wasserman Music, about today’s artist deals. When asked if the reps could get the costs out of the deal, Many replied, “Absolutely. Forks. It just depends on the size of the room and what the artist wants. Because on the one hand, we want to make sure that when they arrive the artist has everything they need for the show. But on the other hand, everything they don’t need. “They don’t want to pay extra for it. We want to justify these expenses.”
However, the fees that agents are less successful at removing are product fees. Most venues take a 10% to 40% cut from artist product sales. I’m sorry but this is insane. The artist may not receive any share of the revenue or “service fees” generated by the venue from the bar, kitchen, cloakroom or parking lot. But will the venue keep the money earned from the products? Fans wonder why shirts and memorabilia at concerts are so expensive.
Here is the deal. Margins at Merch are not that good. An artist can make a 30% profit from the sale of a t-shirt (not to mention the opportunity cost of the time people spend designing the product), but if the venue takes 30% of the product, then the artist is actually to lose make money by selling goods. So the artist can mark product items (in fact, upset their fans for charging too much) or get hits and simply look at the products as a promotional item.
Eshak said, “We made the calculation in our company. We’ve paid hundreds of thousands of dollars to multiple customers at points of sale alone. Then at the end of the day you look at the P&L and say, ‘Was the time spent on this worth it?’ you say.”
I believe that it is unethical for a venue to take a share of the artist’s products. This is an embarrassing practice and every agent should put a lot of effort into removing product charges. Artists need every last dollar to survive on the road.
Fortunately, some venues are eliminating product fees. Ineffable Live, which has run 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 the 20% sales fee following Lawrence’s testimony.
Tour merchandise tracking platform and POS system AtVenu said the average spend per person for venues with 500 to 1,000 capacities is $3.65. So, if 1,000 people attend the show, you can expect around $3,650 in product sales. However, I spoke to executives who said their artists sometimes make more than $8 per person in product sales.
Many touring bands playing in midsize clubs can fetch $10,000 a night in product. If a venue misses 20% of that, the artist loses $2,000 per night. On a 50-day tour this could be $100,000 the artist missed. And we’re not talking about superstars here. We’re talking about hardworking independent groups trying to make a living.
Theo Katzman and his band put on an incredible show at Wiltern. I decided to buy a hat at the counter and was surprised when a tip window (the kind you see in cafes) appeared on the screen after I clicked on my credit card. I asked the product seller (who works for The Wiltern) who the tip went to, the group, or the seller, and he said it went to him, the seller.
Everyone is getting off the top of the artists and it’s disgusting.
There is no universe where product vendors have to tip from fans of the artist. If anything, these tips should go to the artist!
If organizers and venues continue to rock artists for every dollar, the live gig business will collapse. LiveNation Earned $16.7 billion in 2022Many artists such as Little Simz, Santigold, Animal Collective, Sampa the Great, Stormzy, Gang of Youths had to cancel their tours because they could not work financially.
I bet an additional 30% increase in product sales would go a long way.
Ari Herstand is the author of the best-selling book How to Succeed in the New Music Industry?, Webby host of the award-winning show New Music Business podcast, CEO and founder of music business education company Ari’s Purchase and Los Angeles-based musician.