[00:00:00] James: welcome to episode 171 of the Bandhive Podcast. It is time for another episode of the Bandhive Podcast. My name is James Cross and I help independent artists Tour Smart. This week I'm singing Cross from the one, the only Matt Hoos of Alive in Barcelona, who seems to be having some technical difficulties with his sunglasses. You doing okay there, Matt?

[00:00:22] Matt: my lens popped out. Now the ultraviolet rays of the sun are going to burn my eyes

[00:00:26] James: the ultraviolet ray. I like that

[00:00:30] Matt: That's what I used to say to people when I sold sunglasses on Warped Tour.

[00:00:32] James: Oh, I know, I've heard every single line you have. And they made me laugh. Even like the hundredth time, like even the hundredth time on the same day.

[00:00:41] Matt: you gotta

[00:00:42] Matt: have a bad sense of humor if you're gonna be in a hundred degrees every day.

[00:00:44] James: oh yeah, I remember when I was talking to kids in line at Warp Tour and like, you were nearby. I, I'm just like, oh yeah, that guy's so funny.

[00:00:52] James: Like you should stop and listen to him. Like, I'm gonna stop for a second. Just listen. And then I'd like keep going and talk to them. that was literally though. I would stop and [00:01:00] have them. Appreciate you

[00:01:02] Matt: well, I appreciate you. the best part about being on Warp Tour is being insane because that's really what people are there for. it's like the car accident that you drive by on the highway. It's like everybody looks, nobody wants to see a dead body, but like, they do, like, for some reason they're like, oh, am I gonna see something gruesome?

[00:01:19] Matt: Am I gonna see something terrible? I, I remember, uh, what's his name? the guy who used to sell sunglasses all the time,

[00:01:24] James: was it the Australian?

[00:01:26] Matt: No, the guy before the Australian, But the guy who had the cart and the fanny pack, and like a big sign, a megaphone, all that, and he would just like walk around making fun of people and everybody thought it was hilarious. So everybody would buy his product. He literally said that he had to stop doing Warp Tour because it was like a drug for him he's like, by the time I get to the end of this season, I just feel like a terrible person. Cuz all I've done is like make fun of kids for an entire summer. And all of them have loved it so much that they gave me my money.

[00:01:53] Matt: You know, , it's just like, what a weird paradigm. high school is a crazy type of world and that's really what Warp [00:02:00] Tour is,

[00:02:00] James: I'm sure that's where the Bowling for Soup Song High School never ends, comes from, we should ask

[00:02:05] James: Jared. There was even a prom. There was Warped Tour Prom.

[00:02:08] Matt: Yep, absolutely. I went with Andy from, we came as Romans. I think I still have that picture on my Instagram. But there's an old adage that, you stay the same age that you get famous as, So it, it wouldn't surprise me if, especially a lot of those pop punk bands are, you know, very much so, like, still high school mentality.

[00:02:26] Matt: four year strong still coming out, wearing letter jackets every day,

[00:02:29] James: You know, that certainly explains a lot about certain bands who have done not so good things.

[00:02:36] James: that's an important topic, but we don't need to go down that road today.

[00:02:40] Matt: agreed, yeah, don't steal stuff while you're on Warp Tour or on any tour, or just don't steal stuff. that's a better way to live your life.

[00:02:47] James: Don't steal stuff.

[00:02:48] James: Don't manipulate people. Don't abuse people. , don't be like Johnny Craig. let's just put it at

[00:02:53] James: that

[00:02:54] Matt: and don't talk to underage girls.

[00:02:55] James: I I was getting there without saying it,

[00:02:59] James: I was [00:03:00] having an interesting conversation about that with a friend the other day, which I'm not gonna get into the details, but I don't know. For me, it's always been very easy to just be respectful of people. It's mind boggling that some people don't have that.

[00:03:12] James: it's probably that they're like narcissist or lack of empathy or something, but I don't know. Anyway, all that said, Matt, you fixed your glasses, you popped that lens back in. How are you doing today? Oh, okay. Leland pull up Matt's video for this please, because it is Matt and Andy. Oh, Andy Glass Jaw. He's in Glass Jaw now.

[00:03:29] Matt: No, no, no. This is, this is

[00:03:31] Matt: uh, maybe he is in Glass John now? No, he's still in. We came as romance. I think his last name is just glass.

[00:03:38] James: Got it. And he's a glass Jaw fan. I guess I ask because I'm seeing glass jaw four days

[00:03:43] James: after this episode drops.

[00:03:45] Matt: His name is just Andy Glass, but yeah, this is I think San Antonio. that was Warped Tour Prom a lot of years ago.

[00:03:52] James: it had to be 2013 or earlier.

[00:03:54] Matt: it may have been 2013.

[00:03:56] James: So anyway. Matt , how are you

[00:03:58] Matt: Hi, I'm doing [00:04:00] so great. I just went on a five minute rant

[00:04:02] James: Well, I'm glad to hear you're doing well, Matt. Yeah, that was a good rant and fun little discussion of our History on Warp Tour. we're gonna talk about some history. Now, I gotta say I'm excited because we're actually finally recording ahead again. This episode drops on March 7th.

[00:04:16] James: Yesterday I recorded the episode for March 14th and tomorrow, which is February 9th, I'm actually flying out to Germany. For my uh, yearly family visit and I am stoked Flying Air Lingus. So unfortunately they moved the plane named St. Patrick to their UK division. So I'm not gonna get to post a picture of it with the Paris song on my story Paris has a song St.

[00:04:38] James: Patrick and they're from Boston where I'm flying out of. So that would've been cool. That's the plane I was on last time when I flew into the pandemic, That was an adventure. But some Air Lingus a three 30, which I'm stoked for because the A three 30 is one of my favorite planes after the A three 40, which the difference between the two is one has two engines and the three 40 has four engines.

[00:04:57] James: And I basically grew up on the A three [00:05:00] 40 with Lufthansa. Anyway, all that nerdy stuff. Luthans is awesome. The A three 40 is awesome. Luthans is the only airline that still flies the A three 40. Just putting that out there. Best airline ever for keeping it available. This week we're gonna talk about the at venue 2022 merch report, because guess what?

[00:05:19] James: Merch is big money. And Matt, the first thing I'm seeing here on this report is that in 2019, the average per head it shows was $5 and 54 cents. And I like that number 5 54 is a good number because nerding out, again, the plane I did most of my training in is Cessna 105 54, or if you're talking to atc, just say Cessna 5 54.

[00:05:41] James: So I like that Number 2020, no data because 20 20, 20 21, that average per head skyrocketed to 8 47 and for 2022 it's down a little bit. It's down to eight 16. That is 47% more than it was before the pandemic. So [00:06:00] artists are making more money on merch per head than they were prior to the pandemic. That is fantastic. Now at Venue, in case you don't know, is a merch selling app and they track all of the sales that come through their app, which is really handy. Now Matt, do you use App Venue for a live in Barcelona or do you use something else?

[00:06:19] Matt: We use app menu for reporting.

[00:06:21] James: it's absolutely the industry standard, I love at venue, but it's like 50 or $60 a month. So if you're not consistently touring, consistently making money, look at other options. My go-to, if you're just playing like one or two gigs a month would be merch.

[00:06:36] James: Cat It's I think like $11 a month. It's great. Fans can pre-order merch to pick up at the show, like prepay and pre-order, which is absolutely amazing and it's really great if you're not actively on the road. If you're actively on the road, you probably want to go with At Venu now at venue. This report covers shows from tiny bar shows all the way up to the biggest [00:07:00] of arenas, so that average per head of $8 and 16 cents is a very wide spectrum.

[00:07:07] James: And you'll also see that it is quite skewed when we get there. But first I want to jump in and say the average number of items purchased per show is 586, and that average, total gross merch sales per show is 20,770. The genre of the most shows though is country, which I find interesting. And their average show attendance is 2,652, which is quite large. if you think about like a large club, you're probably not gonna see a club bigger than 3000 or so. a large club is anywhere from, let's say like 1200 to 3000. A medium club is like seven to 12, these are rough numbers. And a small club is like five and below, so 2,652, those are big shows. But if we take this 20,778 and divide it by 2 652, our average per head should have been eight 16, but it comes out to 7 83. I guess. [00:08:00] Interesting. Something doesn't add up there. , I, I'm sure I'm just not doing the math quite right or quite the same way as they do in their report.

[00:08:06] Matt: Yeah, I was gonna say there's probably some hidden metric, but it is also interesting. You'll notice that it says the genre with the most shows is country. And yet when you actually look at the breakdown, country is not even on the list as far as Average dollar per

[00:08:20] Matt: head it's not even there. Same with the average gross sales by show. And so it's, very interesting to see that country is playing the most shows, but they are still not even considered amongst the top. Now I think this is probably metrics that have to do specifically with, show sales exclusively, while touring and not anything to do with, you pre-orders, your pre-sales, your, v i p tickets and anything like that.

[00:08:44] Matt: This is purely your gross income from guarantees and merch sales. So you have to, look at all this through that lens. for anybody that doesn't use that venue or look through this stuff, you definitely should, cuz there's a lot of really fascinating metrics that you can g.

[00:08:57] James: oh, absolutely. And we'll link to the full report in the show [00:09:00] notes, which you can [email protected] slash 1 71. And just a note, Matt guarantees aren't in this either, it's just the merch

[00:09:07] James: sales from shows. so looking at that top 15 list you mentioned, I just want to give a shout out to Hard Rock, metal, rock and punk.

[00:09:15] James: Oh, and alternative, because on the top 15, hard Rock is three, metal is four, alternative is five, rock is 7, 8, 9, 10, and punk is 11, and Indie rock is 12. So like all my favorite genres are in the top 12. And punk is still getting a per head. Of $8 and 30 cents, which is above the average rock, is

[00:09:38] James: at

[00:09:39] James: 8 88.

[00:09:39] James: Oh wow. I wait, they, they differentiate metal and heavy metal on here too. so heavy metal is number 10 right above punk, 8 38 whatever that is. Maybe they mean like old school metal is 9 76. Alternative is 9 74. Hard Rock, 10 73. But guess what, if you didn't already know the answer, what would you guess is the number one per [00:10:00] head genre And knowing that number two is $11 and 34 cents, what's number one's per head?

[00:10:06] Matt: I had to guess, you know, without me looking directly at this report and knowing, I would've guessed rap to be honest, RAP or edm. Because EDM shows are just so drastically expensive. But now, specifically through the guise of merch I do feel as though underground music.

[00:10:21] Matt: Lovers in general are much more so the type of people who spend money it doesn't really surprise me that your, your metals and your, your punks make as much money as they do because the people that are going to metal and punk shows are people that really love music and took the time to find these new bands and like, identify with them.

[00:10:37] Matt: And, but I would've said like rap just because, you know, rap is culturally popular. It has been culturally popular for a very long time. And on top of that, they're always thinking about spending lots of money. their merch costs more money than everybody else's does.

[00:10:49] Matt: So just def facto by the price tag. I, I would've said rap,

[00:10:53] James: and they are number two, to be fair, rap is number two. E D M is number 13. That's kind of a shocker to

[00:10:59] James: me. [00:11:00] I would've expected them to be up there too.

[00:11:01] Matt: But that's because the price of the tickets are so, ,

[00:11:03] James: Yeah, that's fair. High production.

[00:11:05] Matt: yeah, exactly. They need to have high guarantees because they're, having an entire day of lighting set up and l dms come in and fricking production managers and whole crews.

[00:11:15] Matt: We, we played the masquerade, upstairs, I can't even remember who was playing, but they had a semi-truck come in to install the, lights. it was a semi-truck full of lights, just lights. It was awesome.

[00:11:27] Matt: And, and we got to go and watch a couple of the songs up there. we were playing in the middle floor and they were up on the top. But the amount of production quality that goes into EDM is mind.

[00:11:36] James: isn't masquerade also the one with the outdoors freight elevator

[00:11:40] Matt: they were closing it and it's an iconic, heaven, hell, and purgatory. There's three different venues there.

[00:11:46] Matt: the upstairs is heaven. And I think there is an exterior freight elevator. Now that you're saying that, it does sound ominously

[00:11:52] James: loading in an entire semi's worth of lights on a fray elevator outside

[00:11:58] Matt: Dude, you should have seen the thing. [00:12:00] It was, crazy. I've never seen so much lighting in my life.

[00:12:02] Matt: packed to the brim

[00:12:05] James: Well, so thank you for those guesses. Matt, though you didn't know the answer at all, , because you weren't looking right at it, the number one genre per head is K-pop, $27 and 25 cents per head is their average. That is insane. And it comes down to marketing. And I did a little rant about that before we got on the episode, But the average gross sales by show is also for K-Pop, 133,353. Second place is wrap 49,407. So that's almost three times. That's like 2.7 times the second place. Then pop is 44,000 Hard Rock at 33,000 going down quick r and b 24 comedy at 23 Outselling Rock. Also at 23, so that's 23,000 9 0 2 versus 23,750.

[00:12:56] James: Then we see country at 20,000 on average [00:13:00] gross sales per show, and it trails off from there. Punk is not on the average gross sales top 15, which is not surprising cuz punk shows tend to be smaller and average gross sales. Clearly the biggest shows are going to do better Percentage of attendees who buy merchandise broken down by genre, guess who's winning K-Pop at 31%. Number two is hip hop and rap. 24%. Heavy metal. 22%. Pop at 20. Alternative at 19 Indie 19 rock. 18 metal, the not heavy metal. 18 bluegrass. 18 Latin 17 punk.

[00:13:36] James: 16. Comedy 15 hard rock. 15. Country 13 and electronic 13. Okay, so you can see how that trails off very quickly. Now, here's something that is extremely important that I want to stress because this next stat

[00:13:52] James: is something that I still see bands mess this up. I went to a show

[00:13:56] James: with a friend on Saturday and my friend [00:14:00] bought a shirt from one of the local band. And pulled out her credit card and the guy goes, oh, we have PayPal and Venmo. You can scan here, which was fine. She PayPaled or Venmo or whatever. I don't know which one she did, they did have the foresight to have the QR code that you could just scan it there. But this is why this upsets me because 90%, nine zero percent of sales were on credit cards in 2022.

[00:14:25] James: The other 10% were cash. If you are not taking credit cards, which is essentially free because you can sign up for Square and they will send you the reader, there's no upfront cost, and then they take 3% per transaction. You can build that 3% into your price. instead of charging $15 for a shirt charge 20, and guess what?

[00:14:47] James: Then your fees are gonna be about 60 cent. So you're actually making $4 and 40 cents more than you would have if you were pricing $15 for a shirt. build that in and make the extra money.

[00:14:58] Matt: This is a [00:15:00] no-brainer.

[00:15:00] James: yeah, and I get it, Venmo doesn't have fees, but here's the catch. Venmo for business does have fees. It's that same 3% fee. And if they catch you using a private personal Venmo account for business transactions, they're gonna claw back that money and refund people automatically. I've seen that happen to people. You don't want that to happen. And it's not that these people are like requesting their money back, it's that Venmo is like, oh, this was a business transaction, we're gonna give back that money.

[00:15:30] James: Even if the person doesn't want a refund, don't risk that. just pay the 3%.

[00:15:35] Matt: mean, this is literally so easy. To set up. you can set up from start to finish and you don't even need the card reader because you can manually enter card details. on PayPal, PayPal is something like, you can use PayPal, to accept credit cards.

[00:15:49] Matt: You can manually enter a card number. So even while you're sitting there at the venue doing nothing, you can connect to wifi, download the app, connect a bank account, and literally take a credit card it doesn't even [00:16:00] take an hour. it's faster than setting up an actual bank account is for you to give your business the ability to accept a credit card.

[00:16:06] Matt: And I think PayPal has some of the highest fees in the industry, but the fact that you can literally on the fly do that, you can start a transaction, while they're playing their set, if somebody walks up to you and says, oh, I need to pay with a card, and you're like, I can't accept cards.

[00:16:19] Matt: Well guess what? Before the set is over, you can actually. Add an account to your PayPal here, you can get everything going. get all your verification. Emails good to go, and before the end of that set, accept a credit card payment from that person. Not only is this just like more accessible for the client, which is very important, it's also more secure for you because while cash is absolutely wonderful and a good thing to have when you swipe a card, 99% of these services deposit that money into your account either that night or the following morning.

[00:16:48] Matt: So you're talking about taking that money and instantly depositing it into your secure account without having to ever go to the bank. make the physical deposits yourself. So this is absolutely huge especially when you're in a business [00:17:00] account, like maybe you have a business card that's tied to your gas and you get rewards on that now instead of having to go to the trouble of waking up in the morning going and finding whichever branch of bank you have, which mind you, when you're traveling across the country, not all banks exist everywhere.

[00:17:14] Matt: It is very hard to find a Wells Fargo in the Northeast,

[00:17:17] James: same for bank of America.

[00:17:18] Matt: Bank of America. Exactly. Chase Bank is one of the few banks that, like, you can actually find a branch in most states, but even still,

[00:17:25] James: We just got our first one in

[00:17:27] James: Vermont.

[00:17:27] Matt: Yep. See, exactly. And

[00:17:29] Matt: that's what I'm saying. It's like if you don't have these types of things set up, you can obviously still go to the gas station and pay cash for gas. that is totally doable. But guess what? Bands get robbed. The last thing you want is a lockbox full of cash sitting in your van.

[00:17:43] Matt: you were already probably traveling around with your iPods and your, your MacBooks obviously all your gear and things like that. The last thing you need to do is incentivize a robber to come in even more with a big old black lockbox full of cash. So, except credit cards you make more sales people There's so much less friction with people [00:18:00] spending a credit card at a merch table than it is cash.

[00:18:02] Matt: Because people will look at their wallet and they'll say, oh, I don't have enough cash. People will look at their credit card, just be like, boom, gimme two shirts. at this point in the game, we have the internet, we have digital global markets, we have instant payments with cards.

[00:18:16] Matt: There's absolutely no reason for any band ever to not be accepting card payments.

[00:18:20] James: a hundred percent. And especially when the stats are so much in their favor. And I don't wanna harsh on this band because they did have an electronic payment option. They had Venmo They are far ahead of many others who say cash only. We don't do anything electronic.

[00:18:33] James: So shout out to them for at least having that option. But taking cards is so easy. And I, do wanna point out one thing though, Matt, when you type in a card number manually, this goes for Stripe and Square and I think also PayPal here, the fee is actually half a percent higher. So it does cost a little more.

[00:18:49] James: If you do that, it's worth getting the reader and they'll send it to you in like a week or two. if you do need to take a card payment right now, just eat that half a percent. if it's a, what? A [00:19:00] $20 shirt we're talking about, geez, what's half a percent? Uh, 10 cents it's 10 cents. just do it.

[00:19:06] James: it does not matter in the big picture.

[00:19:08] Matt: A hundred percent. I mean, it's built into all your rates. So, so even the people paying cash are mitigating the cost of your fees for the other people that are paying with card. So like in this particular case, 90% of people paid with card.

[00:19:19] Matt: And so with 10% of, let's say you made $2,000 is $200 in cash. if you raised your prices from $15 to $20, then you know your 10% $5 for each of your 10% of clients that all bought that merch with cash.

[00:19:33] Matt: Those guys have easily offset all of the extra fees that you have. the most important thing is be able to take a card. there's no excuse. oh, I don't have a reader. Doesn't matter. Take the card. it's all about making things frictionless.

[00:19:46] Matt: people want to spend money when they're at your merch table. So if you're making it harder on them, you've already lost the battle. They want to

[00:19:52] Matt: come and support you.

[00:19:53] Matt: So make it possible.

[00:19:54] James: I do want to throw one caveat in there, which is if you're touring into Canada and you're from the [00:20:00] US

[00:20:00] James: Square will not allow you to process transactions. So plan ahead and figure out some way that you can make that happen. if you get a Canadian bank account, you can make that happen.

[00:20:11] James: So maybe that's hitting up one of the other bands on the bill and saying, Hey, are you guys set up with Square? Can we use your square for this show? And you just pay us out in cash? something like that. Plan ahead and try to figure that out. And if you're big enough that you're touring through Canada consistently, then just make a Canadian bank account and set that up with a square.

[00:20:29] James: That's the easiest thing. And I don't know how PayPal here handles this. Maybe they do it a little better, but either way, think of those options ahead of time. Because I have been on multiple tours, actually both Warp Tour and a club tour I was doing where we went into Canada and I was like, Hey, cash only tonight.

[00:20:44] James: And to be fair, this was, 5, 6, 7 years ago. Wait, 7, 8, 9 years ago, who, where, cash wasn't as rare. It was like 50 50. Now it's 90

[00:20:55] James: 10 for credit cards. So huge difference. And I think we can [00:21:00] wrap up that rant. we've been harping on this for at least 10 minutes, but that's how important it is.

[00:21:05] James: You need to take cards at your shows for merch. that's just a no-brainer. And, we should also mention at venue handles payments for you. They might even do the international thing for you. I don't know cuz they have their own payment system that's independent of Square and Merch. Cat integrates with both Square and PayPal. Whichever app you use, you have options. Now that said, the average percent of people who buy merch at shows is 20%. That's one in five. That's pretty good. In 2019 it was 11%. So that was one in 10. That's a huge difference. That doubled. The show attendance average show attendance.

[00:21:42] James: Percentage of fans buying merch dollars per head and gross merchandise sales are all up over 40% from 2019. Now, I would argue that if the average show attendance is up over 40%, that just means there are fewer small shows happening or fewer small acts [00:22:00] using app venue. I don't necessarily think that that is a good stat because I think that means fewer independent artists are touring, or fewer independent artists are making enough money to justify the cost of app venue.

[00:22:11] James: They seem to be bragging about that, but I don't think that's good. However, small and mid-cap attendance. Had the largest growth in percent of fans buying merchandise at 22% in 2022. Up from 13% growth in 2019. And small and mid-cap, I believe small cap for app venue is 500, and mid-cap is 501 to 1500. that's not bad. now looking at show breakdown by a tenants grouping. The largest amount of shows happens in the small cap, one to 500 cap range, which makes sense. 28% of all shows on at venue are in that one to 500. Totally makes sense. There's more small shows than there are arena shows. Arena and amphitheater shows are only like [00:23:00] 2.9 plus one plus one, so that's 4.9, let's call it. 5% of all shows are those huge. 37% are 5 0 1 to 1500. This is like your medium and smaller large club shows. And then 18% of shows are 1501 to 3000.

[00:23:16] James: Above that, you get into theaters and arenas and stuff, and that's where it gets lower and lower. But right next to it, there's this very interesting stat of the average per head by attendance grouping, which I just realized, Matt, I've mentioned what per head is on the podcast before, but we didn't explain this today.

[00:23:33] James: the per head is just the average amount of money you've collected based on the attendance drop count. So basically you take all the money you made on merch, this is your gross revenue, and divide it by the number of people who were there. So if you brought in a thousand dollars, let's just keep it simple.

[00:23:50] James: And there were 200 people there. That's a $5 per head. You do a thousand divided by $205 per head. So breaking down the per head by attendance grouping, [00:24:00] not a surprise that the average per head for 20,000 plus shows is the highest. It's $10 and 31 cents, but the second highest is actually in the one to 500 range at $9 and 27 cents on average.

[00:24:14] James: And that's where all your independent artists are gonna live. that's the underground that you were mentioning, Matt. That's the punk shows, that's the metal shows. And if you look, the lowest is actually that 3001 to 5,000 range. So like your theater shows $7 and 23 cents on average. That's pretty bad.

[00:24:32] James: Now, to be

[00:24:32] James: fair,

[00:24:33] James: I did merch for, I'm not gonna name them cause this is not a number I should probably share publicly. . I did merch for a well-known YouTube act last summer and they were playing a 900 cap room and the drop was about 460. And the merch table was tucked away in a corner in a very, very bad spot.

[00:24:55] James: And our per head was like $2 and the 13 cents. And I felt so [00:25:00] bad cuz I was the seller that night. it was my responsibility to move their merch and it was just like not moving. So that was the unfortunate thing about that show is a $2 per head. But seeing some of these numbers where it's like 7 23 is the lowest per head, I'm just like, oh man, that was really terrible.

[00:25:15] James: That was just bad. So I already know next time if I play that venue again or if I work that venue again, I'm gonna print out a giant sign that says merchandise this way. literally like you went in the front doors and then the venue doors were there, it's a theater show. And on the way back out, people would just walk out the theater doors 10 feet through the lobby and out the main doors when I'm like 30 feet to the left, tucked away in a corner.

[00:25:39] James: So I need a sign that says, Hey, merchandise this way, because no one looked over to their left. why would people look over to the left? The bathrooms are to the right. So if they're going over that way, they're not walking past me. There's literally nothing. I was in a dead end corner, I don't think it was my fault that the per head was two 13 or whatever it was, but now I know for that venue, I'm gonna be prepared next time [00:26:00] to hopefully get more in line with that $8 per head.

[00:26:03] James: And also, since they're a YouTube acted, I don't really know how much that lines up to be fair. That all said, here's where at venue gets a little, uh, shall we say snarky, Matt? I think snarky is the right word.

[00:26:17] Matt: That's a good term.

[00:26:18] James: At venue is directly calling out the streaming providers because they say streaming versus merchandise. They say an average stream is 0 cents, which that's not necessarily. That's the Spotify average. If you look at other platforms, the average is higher. Apple pays about twice that. And Napster ironically pays like 20 times that or something. I haven't looked at the numbers lately, but it's a lot more. oh, and here's the other number is one band tea is $38. I get that, that's the average. But to put this into DIY band terms, which I will do in a second, they say it's 11,950 streams equal one band T. [00:27:00] That is being a little optimistic in my opinion, because they're not factoring in the costs that come with that t-shirt. Now obviously you have the sunk costs of writing, recording, releasing your album. But once it's out there, if it's on streaming, you do not have any additional costs except maybe like $20 a year for whatever digital distribution you use. However, with merch, you are going to have a lot of costs for your product. You have to pay for the design. So let's just toss that one aside. The design, that's like the actual cost of recording the album. But then you have a per unit cost for printing and shipping, and maybe even storage, plus you have those credit card fees. So I think the comparison to make it more realistic would be 20 divided by 0.00318, and that would be 6,289 streams to equal the revenue of a [00:28:00] $20. But let's say it costs you $10 to print and ship it. Well now you're looking at $10 and it's only gonna take you 3,144 streams to equal that. That's still a huge amount of streams, don't get me wrong.

[00:28:13] James: But that's about a quarter of what at venue is saying equals a shirt sale. So I think that number, even though I agree with the point behind it, I think that number is inflated and I'm sure they're just trying to make the point of artists need to sell merch, which I fully agree with. They also say that the average yearly streaming revenue based on Spotify published metrics is $625.

[00:28:35] James: That's a week's worth of minimum wage if you're working a full-time job. Like Vermont minimum wage, I think is 13 right now. That comes out to $520. So that's not a huge difference. And if you're like a four piece band, You're splitting that four ways. That's like what, 155?

[00:28:53] Matt: Here's your one 60 bucks. Yeah.

[00:28:58] James: That's brutal.

[00:28:59] Matt: [00:29:00] Here's your phone.

[00:29:00] James: yeah. But then at venue goes on to say that the average nightly merch revenue from a single show below 1500 caps, so we're talking about those small and mid-cap venues, is 5,527. Now, again, I love that stat, but that's your revenue. Cut that in half. You're looking at 27, 50 or so. and that's assuming there's no whole fee, which I've been called out. A bunch of people are like, what's a whole fee? I don't know what a whole fee is. It's a mer.

[00:29:27] James: I learned hfi. That's what they used to call it. That's what they still call it in the uk.

[00:29:32] James: I'm gonna call it a hfi. You could call it a merch cut. It's the same thing. It doesn't matter.

[00:29:35] Matt: it's a merch rate. See this tattoo

[00:29:38] Matt: that says, what's the rate today?

[00:29:41] James: oh man.

[00:29:43] James: You did not,

[00:29:44] Matt: I absolutely did. And it has a picture of a T-shirt and it says, what's the rate today? Because that is the question that every merch guy asks every other merch guy 50,000 times while you are, keeping your numbers, doing your inventory, and settling up at the end of the [00:30:00] night, or like throughout the course of the day, Hey, do you know what the rate is today?

[00:30:02] Matt: Do you know what the rate is? What's the rate today? and for those of you who don't know what a merch rate is, that is the cut that the venue takes to compensate for things like taxes, as well as that's part of their bottom dollar. they take 15% from every artist that plays if that's the rate.

[00:30:15] Matt: Some people have higher rates, some people have lower rates, some people don't have rates, some people have catastrophic rates, and it's really easy for you to tell which venues and promoters you want to end up working with more because the higher the rate, the less money you're making. that can be really brutal, especially if you're depending on your merch sales, which if you're touring, you are so, and you're already like paying 15% to a manager, 15% to a booking agent.

[00:30:35] Matt: maybe you're paying flat rates to uh, promotion companies. then you have your gas. So that's why James cut that number straight in half and even that is like being kind of, conservative.

[00:30:45] Matt: I would, I would, I would cut the number down by two thirds

[00:30:48] James: I would cut it in half if there's no whole fee.

[00:30:51] James: and I should also point out that show I worked for the YouTube band this summer. Total Pro Act, and I asked their tour manager [00:31:00] what the hall fee is, and she immediately knew what I was talking about. She's like, oh, let me look it up. But that said, there are a few tricks that you can do to reduce that whole fee. First of all, always try to get it specified that the hall fee is to be calculated on your net.

[00:31:15] James: So after your cost of goods sold and after your costs of if you have a seller, their pay for the night goes out. If you have credit card fees, you deduct 5%. That's a standard accepted rate. That's what the box office is gonna charge you, even though it's really only 2.9% most of the time. So just take out 5% for that, and then calculate that whole fee based on your net profit rather than your revenue.

[00:31:37] James: Because if you base it on your revenue, you might actually take a loss because of the whole fee. Whereas if you base it on your net profit and your net profit was $10, , but you brought in, let's say a hundred. Well, okay, so a hundred, you'd be paying them $15, you'd be $5 in the hole, but based on your net profit of 10, you pay them a dollar 50. If it's not specified, base it on that and [00:32:00] deal with any fallout later. Otherwise, try to get it in your contract Specy that it is 15% net. Here's the other secret that too many bands don't know. If it's not in the contract, you don't have to pay it. When the person from the venue shows up and says, I'm here to collect the haul fee, you say, what?

[00:32:17] James: Haul fee. Let me get the tour manager. Look, there's no haul fee in the contract. We're not obligated to pay this. And if they say Wellie, but you sold say Right. We weren't made aware of these terms in advance. We do not

[00:32:29] James: have to pay this.

[00:32:30] Matt: The additional way that you can circumvent that is by having a contract with the headlining band rather than with the venues. And then, headliner will have to pay the ME rate, but you will not. this is a lot of the case, like if you do a buy-on for a tour, those are definitely stipulations that you can negotiate with the band because you're already paying an upfront cost in order to be on the tour.

[00:32:51] Matt: whereas the headliner may have, already booked this tour and they have a 15% me rate at all these different menus, but you worked directly with the [00:33:00] headliner if it's not in your contract with them, then you don't have to pay the ME rate either.

[00:33:03] Matt: might actually be, on a bill of five bands and might be the only band that. Doesn't actually pay a merch rate because, you know, you had to pay $1,500 to be on the tour or whatever. So essentially you paid your entire merch rate up front. But it does make it a little bit easier for you to deal with concrete figures rather than having to say like, oh, did we sell enough merch today to, feed ourselves?

[00:33:23] Matt: there's

[00:33:23] Matt: less moving parts and so it can really make things easier.

[00:33:26] James: Yeah. I like that tip a lot. And one thing I should say is that when you say this, say it in a nice way. Don't just say, oh, we're not paying that. We didn't sign that. Be like, Hey, like, I'm really sorry, I didn't see that in our contract. Can you help me find that? And then if they don't have the contract, you just say, oh, okay, well if you don't have the contract, then I'll pull it up.

[00:33:46] James: But I didn't see it in here. if it's not in the contract, we never agreed to it. and even if they tell you at the start of the show, Hey, it's gonna be this rate, you can just tell 'em straight up, Ben. Actually that's not in our contract. So,

[00:33:56] James: just a heads up now, we're not gonna be paying that.

[00:33:59] James: You can talk to your [00:34:00] managers or the promoter, whoever, but we're not paying that unless you can show us where that is in the contract. you don't wanna blindside them with that at the end of the night cuz then they're gonna be

[00:34:08] James: pissed. Like if you agree at the start of the night and then when they come back you say, oh yeah, by the way, nope, we're not doing that.

[00:34:13] Matt:

[00:34:13] Matt: yep. If you've bought onto a tour, you can literally just respectfully tell them, we don't have a contract with you because you don't,

[00:34:19] Matt: you have a contract with the headlining band who has a contract with them, now that being said, if they're gonna be causing all sorts of strife in your life, it might just be best to, bite the bullet and, pay somebody whatever their measly.

[00:34:31] Matt: Mer rate is, and, you know, if you're a little tiny band and it's like you sold four shirts and they want to take 10% of your money, it's like, okay, fine. here's my $4. be sure to like pick and choose your battles. But the music industry is a dog eat dog world.

[00:34:44] Matt: And the contract world is a dog eat dog world. And the freelance world is a dog eat dog world. And playing shows when you're a buy-on artist around the globe, that is a convergence of those three things. So you kind of have to have some stones in order to say like, oh, I'm sorry, but [00:35:00] like, we actually don't have a contract with you.

[00:35:01] Matt: And you'll meet guys and girls that will fight against you. And you'll meet people who are like, okay, cool. Yeah man, no worries at all. Thanks so much. you gotta approach every situation with patients and uh, Inner peace . Cuz sometimes it can be frustrating.

[00:35:15] Matt: Sometimes venues will literally have some secret person watching you sell merch and they will literally make tally marks about all the items that you make. I remember playing Kansas one time and this lady came up to me and told me all the merch that I sold and my response to her was, how much did I sell it for? Because they're taking a percentage of my sales. And she didn't know what to say. And I said, look, I'm more than happy to work with you, but I mean, I literally have a $5 bin out here and I have $50 hoodies. So you can't just come up and say that I sold 30 items because 10% on $5 is 50 cents and 10% on $50 is $5.

[00:35:50] Matt: So I mean, you're talking about a 90% difference in price increase. and people will try to swindle you. some people aren't trying to swindle you. They are just clueless, playing Las Vegas [00:36:00] is one of the worst things ever cuz you have to like do count ins and count outs and like, it's a giant headache.

[00:36:05] Matt: But the merch front and the merch rate can definitely be things that are, super frustrating. And if you're not mentally prepared for that expense at the end, it can be something that comes along and sweeps all your profit out from under you.

[00:36:14] James: Yeah, absolutely. And the best thing that I can say for this is have a spreadsheet that automates all of this so you can just put in your numbers at the end of the night and be like, yep, that's the cut. You know? That's our profit, our revenue, our gross, our net. And really, I think one last thing that I just wanna touch on before we move on from whole fees and me rates, Matt, is you mentioned sometimes it's just worth saying, you know what, here you go.

[00:36:36] James: If somebody's trying to say, Hey, you know, 30% and they're really adamant about it, just say, Hey, we'll meet you in the middle and do 30% of net. if they want 30% of your revenue, make that compromise. And you can say, look, take it or leave it. We're gonna walk away now. Or we'll give you 30% of net.

[00:36:50] James: we're not gonna give you 30% revenue. Cuz then we're actually in the hole. we're really sorry we did not make that much. And we're not at a price point where we can take a 30% hit and still stay in the [00:37:00] black and get to the next city. But if you're not gonna leave us alone about this, we'll give you 30% of net right now and we'll never come back. Simple as that. Now this is where it gets interesting. And Matt, I remember we did an episode about merch way back in 2020. I can't remember if it was you or Aaron, but the percentage of total gross merch sales from the top three items out of the whole line is 61%. and 41% of shows have 15 or more items. So you're loading in 15 plus items. And three of them outsell everything else. 61% to 39%. Woo. Bring less stuff

[00:37:36] Matt: Yep. Trim it. You don't need to have a boutique.

[00:37:39] Matt: You need to have three to five things that sell well.

[00:37:42] James: And getting into that, I'm gonna skip here. They have the top markets, which Phoenix is number one. Vegas is number 13.

[00:37:49] James: We'll skip that for now. But the top selling items of 2022, and 51% of all items sold at shows are t-shirts.

[00:37:59] James: What a [00:38:00] surprise. Shocker. Who would've thought $38 on average? that's high, but fine. Number two, coming in at 5%, we're talking literally a 10th. we've reduced tenfold from first place to second place is the hat, $35. Number three at 4%. So only 1% reduction is the pullover hoodie. And then we go on to a long sleeve shirt, acui, a sweatshirt, a poster, a tote bag, a cd, and stickers. the average price for CDs that I'm seeing here is $29. That's actually also really high,

[00:38:31] Matt: my guess

[00:38:31] Matt: is that they're compiling CDs with vinyl.

[00:38:34] James: That's possible. Yeah, because vinyl out sells CDs typically, Now let's go back to those t-shirts though, because remember, 51% of all items sold at shows are t-shirts. The top color of T-shirts is the black T-shirt at 53%, so literally over half of all those items sold are t-shirts, and over half of all T-shirts sold are black.

[00:38:56] James: That means 25% of all items [00:39:00] sold are black t-shirts across the industry. Second place on T-shirts is white at 8% when you're looking at the colors, it's 53% or black, 8% or white, 6% are tan, 4% tie dye, which that's kind of cool.

[00:39:13] James: 3% blue, which they've put in red on the report. For some reason, 3% gray and 23% are all other colors. Why do they make blue red on the highlight? Like the others, like tan is tan and tie dye is gray, which you can't really make a tie-dye icon. But my point here is if you wanna sell merch, have at least one black T-shirt.

[00:39:33] James: If you only have one shirt design, it better be black. If you have two, at least one of them needs to be black That will by far outsell whatever else you have

[00:39:42] James: Now, trends that app venue is expecting to continue in 2023 is cashless payments and credit cards. We talked about that.

[00:39:50] James: We've beat, I don't know what's the vegan equivalent of a dead horse.

[00:39:53] Matt: Beating a dead cabbage

[00:39:57] James: [00:40:00] ticking a dead cabbage. I like it. Tipping tip amounts are up and more artists, venues, and festivals are accepting them. I do not necessarily agree with that out of my own experience because I did not get a single tip at that show. I worked over Summer , but again, our per head was $2 and 13 cents or something.

[00:40:17] James: So that was a weird show in general. cause it was a YouTube show. It wasn't really people who go to shows often. So that might be part of it. Here's something to contradict what we were just saying though, which is more colorful merch. Although black is half of all T-shirts sold, more colors are popping up.

[00:40:32] James: So I think that's kind of cool, but we're still talking over 53%.

[00:40:35] Matt: they're not gonna sit idly, but if you were to like place a merch order, maybe you don't want to place an order for 100 tie-dye shirts, get a 100 black shirts and get 12 tie-dye shirts. there's ways that you can, divvy up your print and whatnot. is not to shy you away from having them, cuz some people really do like colors and generally the people who like color is like a really boisterous color in general.

[00:40:56] Matt: it's stark and draws attention [00:41:00] to it. And it's something that's a little bit unique and has a little bit of personality. So like, you can definitely have some colorful pieces in there, but 26% of all sales at a show are black t-shirts.

[00:41:11] James: That's across all genres too. So if you're like a punk band or a metal band, it's probably gonna be more like 60% of all sales

[00:41:17] James: are black t-shirts.

[00:41:18] Matt: say a little, you know, blonde-haired white girl, go into a country concert, buying these black t-shirts, like, probably not. They're buying the bedazzled, fun Kenny Chesney shirts. like you were saying, if this actually was a breakdown between different genres, I completely agree.

[00:41:32] Matt: hardcore metal, punk rock, all of the underground scenes are going to show, I, I wouldn't be surprised if that figure doubled,

[00:41:38] James: easily. and I have two little examples about that. One, I actually worked at Tim McGraw show on the way to Alaska last summer. It was literally on the way to the airport. So I was like, oh, I'll work at Tim McGraw show in Hartford, Connecticut. now I can write this off as a business expense, this portion of the trip.

[00:41:55] James: And what you're saying, Matt, is absolutely right. Like most of the women were wearing white or like blue [00:42:00] jean vests or something like that. But a lot

[00:42:02] James: of the guys did have black Tim McGraw shirts, so you might wanna divide that up too. And at the merch booth, have like men's shirts and black and women's shirts and white and like, I'm not saying make it everything black and white like that, but if you're gonna have options, have those options a. it all depends on your genre.

[00:42:19] James: and the second thing is that how you dress really makes a difference. When I went to that show that I was mentioning the other night, I went up to the box office and the venue has two rooms and I said, oh yeah, one ticket for tonight.

[00:42:30] James: And then after about 10 seconds, the lady was like, looking at the computer, said, oh yeah. Which by the way, like in this small room, I'm not sure if there's a a show in the big room tonight. She goes, oh yeah, there is, but it's sold out. So I knew which one you were talking about.

[00:42:41] James: Plus you don't look like you would fit in with that crowd anyway, . I was like, oh really? What's in there? She's like, oh, it's sounded like DJ Night or something like, oh yeah, that's definitely the punk show is me And you know, there I am, like all Justin Black. I had my Bernie Sanders shirt on, skinny jeans, like a black jacket.

[00:42:59] James: keys [00:43:00] hanging off a Caribbean or it's like, oh, totally, I, I'm going to the DJ night. Like, no. our last thing to touch on here though, Matt, is something that we already mentioned. This is another trend that at than you expect in 2023, is smaller product lines. We are already saying don't bring 15 plus things.

[00:43:13] James: You don't need that if 61 was it? Yeah. 61% of sales come from your top three items at venue is seeing that the top grossing genres are reducing their product lines and seeing a 13% higher average gross sales per show. So what you're doing here is you're cutting down on overwhelm because if you have 15 items, people like, I don't know which one I wanna buy.

[00:43:37] James: I have 50 bucks. A shirt is 40, so I can only get one. Ah, there's so many, I don't know. I'm just gonna go buy something online later. But if you have three shirts or even two shirts, a hoodie, a hat, and then your records, which to be fair at, then you might be counting individual CDs as different items, like if you have 10 different CDs.

[00:43:58] James: But all that aside, if [00:44:00] you reduce the amount of choices people have to make, you will sell more.

[00:44:04] James: I've seen this where a band has like eight different shirt designs. I literally look at that. I'm like, I don't know which one I want. I can't decide on the spot, so I'm not gonna buy anything. A band has three designs.

[00:44:15] James: I go, I want that one.

[00:44:16] James: It's as simple as that. You are literally adding friction to that transaction by having too many options and overwhelming your customers. I was talking about this before the episode, Matt, with the restaurant.

[00:44:27] James: You go to, let's say Burger King, they have like 15 things on the menu maybe, and you can get them in different combinations.

[00:44:34] James: That's it. If you're going to Burger King, you look at the thing, you're like, that looks good. That's what I want. Now I go there, I get the fries cuz they're vegan. McDonald's frieds aren't vegan. So that's like all I eat at Burger King, which I don't do often, but on the road it's useful. If I go to like this amazing vegan restaurant, I just end up ordering the same thing every single time because they have like 30 options and I love Nourish.

[00:44:54] James: They're an amazing restaurant, but they have so many options that the first time I didn't know what to get and I just [00:45:00] picked something and I stuck with that. I get that every single time and I've dabbled in a few other things, but for the most part I go back and I get the poutine because I know it's good.

[00:45:09] James: And to try everything, I would literally have to go another 20 or 30 times. So I keep it simple and I go with what I know. If I'm looking at that merch table and there's 30 different items, I'm probably gonna say I don't need that. I already saw the show. I can buy something online when I have more time to think about it.

[00:45:25] James: So I'm not gonna buy tonight. That does it for this episode of the Bandhive Podcast. Thank you so much for tuning in listening. I really appreciate it, and I hope that this insight into the 2022 at Venue Merch report has given you some interesting and inspiring thoughts onto what you can do for your band to sell more merch.

[00:45:43] James: In 2023 and beyond. Now, some of the things we harped on were really things that every artist needs to do well as other things are just general things to keep in mind that you can take inspiration from and go out there and try your own thing. You don't have to do everything the way [00:46:00] we say to do it.

[00:46:00] James: Just make sure that you do the things that are essential. having a credit card reader that is not an option, or having at least one black T-shirt that is such a no-brainer. So some of those things you should absolutely do other things. Say, Hey, you know what? Maybe I wanna sell a blue shirt. Now that I know 3% of all T-shirts sold are blue.

[00:46:19] James: Like I can give it a shot, but I'm not gonna print as many of them as I would the black shirts, whatever it. Be open to trying new things, but also make sure that you have the core elements of your merch empire in place. And I do say Merch Empire because this is where your money is going to be coming from.

[00:46:37] James: So be sure to stay on top of that. we'll be back right here in your favorite podcasting app next Tuesday at 6:00 AM Eastern Time. Until then, I hope you have a great week. Stay safe, and of course, as always, keep rocking.

[00:46:50] Matt: every day is matching Flannel Day.

[00:46:52] James: Oh yeah. How we did it again.

[00:46:54] Matt: That's right.

[00:46:56] James: I, I think you're wearing a different one, aren't you?

[00:46:58] Matt: Yes. This one is actually my [00:47:00] wife's

[00:47:00] James: Ooh, spiffy. Are the buttons on the wrong

[00:47:02] James: side?

[00:47:03] Matt: actually not, this is, it's still a guy's shirt that she wears, but it's like a thinner, softer material. So it's like, not like a thick flannel. It's, almost like a polyester. It's kind of, kind of silky. Feels good on my body.

[00:47:17] James: that is nice. Yeah. So this one, this actually lives on the chair I'm sitting on, like if I'm not recording, it's just on that chair constantly because Tmmi, I get sweaty when I'm recording

[00:47:26] Matt: yeah. Me.

[00:47:27] James: So I'm just like, okay. And I realize this color goes well with TikTok. the TikTok clips I do in this flannel do better than if I'm wearing like yellow or blue or purple or whatever.

[00:47:37] James: But yeah, I think like the red one and I have like a black and gray fade flannel where it's not

[00:47:42] James: like just checkers, it's like fading. I think those two are my favorite.

[00:47:46] James: And I have a nice yellow one that's a little thicker. Oh, I have a green one too. I have too many flannels to pick. Hey, that's a, that's a merch idea. Flannel

[00:47:53] James: shirts with a print on the back. But the top selling items of 2022, and this is where I love to nerd out [00:48:00] about because it's about God damn it. Again, I'm not wearing a black shirt, I'm wearing, this is like a navy blue. Anytime I talk about why you need to sell a black t-shirt, cause I almost always wear black T-shirts.

[00:48:09] James: I'm not wearing a black t-shirt. Last time it was

[00:48:11] James: gray. And this one's like navy blue. Is that also like a blue

[00:48:14] Matt: No, this is black

[00:48:16] James: Oh, that's black. Okay. Okay. See it looks like the same cuz the lighting on me, it's like it looks black, but. A dark. It's not even dark anymore. It's bleached by the sun. hashtag thanks. Warped tour. Rocket Shop is up to, they said it's a mess, dude. I'm sorry. Rocket Shop is up next with some great man.