The LURCH to MERCH
FORGET THE MODEST CONCERT T-SHIRT — TODAY, ARTISTS ARE CASHING IN WITH AN ARRAY OF INGENIOUS SWAG
Few pop stars understand the power of merchandise like Taylor Swift. The singer’s campaign around the launch of her latest album Midnights, provides a perfect snapshot of how a modern pop machine works.
A moonstone-blue vinyl version of the album, which was available to pre-order in the UK for just over $57 plus delivery charges, came with a hand-signed photo of Swift and featured one of four collectible album jackets and an eight-page lyric book with never-before-seen photos, among numerous other “collectible” touches. The album also came in lavender, mahogany, jade green and “blood moon” colours. Anyone who pre-ordered Midnights on any format from her official UK store also got a pre-sale code for her forthcoming, yet-to-be-announced concert tour.
And this was just the album. Over the years, Swift has sold merchandise including clothing (from cardigans to hoodies), jewelry, rucksacks, sunglasses, beach towels, water bottles and umbrellas. Her legions of fans, who call themselves Swifties, can’t get enough. Product lines regularly sell out. Almost a decade ago, Billboard estimated that Swifties spend an average of $26 on merchandise per ticket at her live shows. That’s a lot of stuff — and a lot of revenue.
Merchandise has grown in importance in the music industry in recent years. Swift is far from alone in riding the wave. Rockers Def Leppard are currently offering fans the chance to buy an autographed commemorative plaque of their recent U.S. stadium tour for $1,300. There are two key reasons behind the industry’s renewed obsession with merch. Firstly, as the likes of Swift understands, it gives fans a sense of proximity to their idols. What better way to feel close to Jungkook from K-pop boy-band BTS than to buy the same round earrings he wears ($27.25 from the BTS website)?
But there’s another reason. As income from streaming fails to make up for the decline in physical album sales (on average, an artist gets 0.0046 cents every time one of their songs is streamed) most stars need to
find new revenue streams.
The lurch to merch is stark. Recent financial figures from Universal, the world’s biggest record company, show that revenue from “merchandise and other” channels grew by a staggering 68 per cent over the first half of 2022. By contrast, revenue from recorded music grew by just 10 per cent. Granted, merchandise makes up a relatively small slice of the pie as compared to recorded music (euros 248 million vs euros 3.6 billion — Universal is based in the Netherlands). But extrapolating out the half-year figures, it means Universal can expect merchandise sales this year of half-a-billion euros, or $673.6 million. Given that the company accounts for 32 per cent of the global music industry, one can estimate that total industry-wide merchandise sales are worth around euros 1.5 billion (or more than $2 billion) a year.
This environment embraces methods old and new. While the internet means new lines can be unveiled (or “dropped,” in modern-day parlance) at a moment’s notice, artists are also opening old-fashioned shops to peddle their wares. When Ed Sheeran released his album No. 6 Collaborations Project in 2019, he opened 32 branded pop-up shops around the world simultaneously.
Last Christmas, temporary shops opened in London selling Queen and David Bowie merchandise, joining a permanent Rolling Stones shop that opened in 2020. And recently, rock group The 1975 opened a temporary shop on London’s Brick Lane to coincide with their new album. A packet of 1975-branded cigarette rolling papers cost $6.
We’ve come a long way from a stack of band T-shirts on a trestle table in the foyer of a grimy concert venue. Alan Edwards, the veteran music publicist who has looked after the Spice Girls and Bowie, remembers the days of merch bootleggers being chased down the street by an artist’s official merchandise team. The territorial rows over swag could
get “pretty tough,” he says. “Nowadays, merchandise is a slick global operation with many levels to it. Concert merchandise is just the tip of a very lucrative iceberg.”
Edwards recalls being in a Fred Segal shop in Los Angeles and seeing a Bob Marley T-shirt priced at hundreds of dollars. “That T-shirt would have originally cost a fiver!” Edwards remarks. It’s worth noting that a black market does still exist, but it’s getting smaller.
Merchandise has always been crucial to some bands’ finances. According to AC/ DC biographer Mick Wall, the Australian rockers were struggling in the late 1970s but shored themselves up by sales of T-shirts, patches and sweatbands, with Iron Maiden and Motorhead soon following suit. “AC/DC were one of the first to recognize how much value the collector-mad, mostly male rock audiences placed on owning these products,” he wrote.
However, in the 1960s, the Beatles put their name to a dizzying array of products. They had outsourced their merchandising operation to a third-party company. Big mistake. The companies negotiated a 90 per cent cut of profits, leaving the band with very little of the upside but with their likeness pasted on thousands of products from dolls to tins of talcum powder. The band had failed to grasp the two holy grails of merchandising: quality control and scarcity.
Joel Rabinowitz used to run a company called Backstage Pass that looked after the merchandise of more than 500 artists, including Pink Floyd, Madonna, New Kids on the Block and The Beatles (in Canada). He retired in 2011, but recalls how the importance of merchandise grew as sales of physical music declined. “One of the last tours I worked on was a Bruce Springsteen tour and it was financed by the upfront merchandise money. In the old days, bands used to make records and tour to promote the records. Now the records promote the tour,” says Rabinowitz.
Not surprisingly, record companies want a piece of the action. Universal now owns a merch company called Bravado that claims to be “the leading global provider of consumer lifestyle and branding services.” It manages merchandise for Ariana Grande, Elton John, Guns N’ Roses and Swift. Meanwhile, Sony, the world’s second-biggest label, has launched a cutesy-sounding merchandising division called the Thread Shop.
So it’s likely that if you buy a band T-shirt these days, you’re buying it from a large, global conglomerate. Some bands are fighting back against the corporate bonanza, though. Earlier this year, indie band Dry Cleaning set up a merchandise shop in a pub close to the Kentish Town Forum rather than in the venue itself. This is because the venue took a 25 per cent cut of sales.
Of course, with inflation running at 10 per cent and the price of concert tickets rising steeply — tickets for next year’s Glastonbury have gone up by $85 to almost $520 a pop — music fans may start cutting back.
But there are bargains, if you know where to look. According to Rabinowitz, his best-selling item of merch ever was U2 condoms.
“We sold thousands of those,” he says. “Millions. Today, they’re worth about a hundred bucks each.” But when I check on ebay, I find a packet from 1997’s Popmart tour (so, well past their sell-by date) for $61.85.
What self-respecting music fan could resist?