Almost one in five Birmingham music venues is taking a percentage of performers’ merchandise sales — dubbed a ‘merch tax’ — according to an exclusive analysis of data by Birmingham Eastside.
The scale of the controversial practice was revealed after Birmingham Eastside asked 32 venues in the city to share their rules on merchandise commissions.
Six take a commission from the sale of performers’ merchandise.
The practice of venues taking a percentage of the revenue from sales of merchandise has become increasingly controversial, according to one industry expert.
David Martin, CEO of the Featured Artists Coalition (FAC), a UK non-profit set up to represent the interests of musicians, said: “Merch sales are more crucial than they’ve ever been for artists. The touring ecosystem is facing a really tricky time right now, coming out of the pandemic and straight into a cost-of-living crisis.”
The practice of taking a cut of merchandise income at events increased after the Covid-19 pandemic closed venues.
Martin added: “Even for established artists, that merchandise commission can be the difference between breaking even and losing money on a tour.
“At the core of it, people are in venues: they’re buying tickets and spending money at the bar because of the artist that’s on stage.
“If the artist was taking a portion of the revenue for bar sales, I don’t think venues would be happy with that.”
The pandemic has hit the music industry particularly hard, putting a third of employees out of work, and hitting the UK economy for £2.7 billion pounds, according to a 2021 report by UK Music.
In 2021 the Musicians Union reported that around half of their members didn’t qualify for financial support from the government.
Which Birmingham venues take a cut of merchandise sales?
NEC Group confirmed that they run a “merchandise sales model” across Resorts World Arena and Utilita Arena, where a commission was charged “in exchange for the use of the world-class facilities, retail space, and the in-house team support that we provide.”
The charity B:Music — which runs Birmingham Symphony Hall and Birmingham Town Hall — said they did not charge “emerging artists or tour supports” a fee for merchandise sales, but added:
“We do charge established headline artists a merchandise fee, and this fee is dependent on whether the artist requires us to provide staff or other facilities.
“Any profits arising from the operation of our halls is directly reinvested to support our mission to inspire a love of live music through performance, participation and learning.”
Academy Music Group (AMG) venues O2 Academy Birmingham and O2 Institute Birmingham didn’t respond to questions about taking a percentage of performers’ merchandise income — but a talent booking agent who recently facilitated a show at the O2 Academy confirmed that its venues charge a 25% commission on merchandise sales.
Band managers and bands have previously also reported that a 25% merchandise tax is charged at AMG venues.
In contrast, 500-capacity venue Nortons Digbeth, who responded that they don’t charge commission on merchandise, added that they provided free access to cash boxes and card readers to performers selling merchandise.
“We don’t charge commission on those either. We just sell the beers.”
Midlands Art Centre declined to comment.
The increase in UK venues taking a cut on merchandise sales has led the FAC to establish the “100% Venues” initiative: a database of venues in the UK that signed up for their zero merch tax pledge. The database currently covers over 500 venues across the UK.
David Martin said: “The FAC is completely against punitive fees for artists selling merchandise. We don’t want to see venues out of pocket if they’re putting in infrastructure – but there’s got to be a fairer system.”