Inspired by the testimony of the band Lawrence and the struggles it faced as an independent act during Tuesday’s Senate Judiciary hearing on Ticketmaster, Ineffable Music Group CEO Thomas Cussins decided it was time to take action.
“After about an hour watching the hearing, I grabbed the phone and started calling the venues we owned and operated,” says Cussins. His message to on-the-ground managers at California venues including The Catalyst and the Atrium at the Catalyst in Santa Cruz, the Ventura Music Hall in Ventura and Cornerstone in Berkeley: no more merch fees for bands.
Effective immediately, all 10 venues owned and/or operated by Ineffable Live — also including the Golden State Theatre in Monterey, Calif.; Fremont Theater in San Luis Obispo, Calif.; Felton Music Hall in Felton, Calif.; the Mystic Theatre in Petaluma, Calif.; Arcata Theatre Lounge in Arcata, Calif.; and the Chicken Box in Nantucket, Massachusetts — will no longer collect a 20% venue cut from touring artists selling their merchandise at Ineffable venues.
The decision will cost the company “several hundred thousand” per year in revenue, Cussins estimates. but “hopes to make it up via a healthier concert ecosystem,” he adds, noting that the merch fee that venues charge artists is often the one thing touring bands say they most want to see changed about the club and theater circuit.
When bands go on tour, their revenue streams are almost exclusively a share of ticket sale revenue and band merchandise sales. In addition, expenses for travel, production and health insurance have increased significantly, as have the costs associated with printing and shipping t-shirts and other merchandise.
On a good night, an independent touring band with a loyal fan base can sell $5,000 to $10,000 in merch at a 500-cap show. Eliminating the venue fee can save some groups $1,000 to $2,000 per night, Cussins says. That can make a big difference in a business where the margins in merchandise are vital to the economic feasibility of touring. The more diverse a band’s income streams are, Cussins says, the less reliant they’ll be on tour guarantees.
“We are on the ground and hearing from artists every day,” says Cussins. “We are seeing how much the costs of everything have gone up — from buses to hotels to flights. So even though the club business is a marginal business, any action we can take to help to insure 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.”
Ineffable head talent buyer Casey Smith adds, “We’ve been able to make our live business work even with increased expenses by having a number of venues and being able to create routes for artists, offering them a number of shows in secondary and college markets between their big city plays. Since we’ve made it work for ourselves, we want it to work for the artists as well. This move is fully aligned with Ineffable’s independent spirit, and in hearing the needs of independent artists, we believe it’s important to put them first.”