The New World of Business

Is the future of music merch?

The music industry's business model evolves again.

Jon Cherry

Oct 21, 2022 • 3 min read

With the pitiful income from streaming not helping musicians to maintain their daily Jack Daniel's and Lucky Strike habit - a lot of them are turning enthusiastically towards selling T-shirts and tote bags as an alternative.

Everyone from Travis Scott to Roger Waters is jumping on the new revenue brand-wagon.

Travis Scott’s two shows at London’s O2 in August were a huge success, selling out in less than two hours – with tickets for the 20,000-capacity venue going for as much as £180. But when it came to profit margins, that was only part of the story. Scott also sold $1m (£900,000) of merchandise at these concerts – surpassing a record previously set by BTS in 2019.

This is part of growing trend:

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.

Inside the Rolling Stones' logo-heavy store Credit: Heathcliff O'Malley

With global inflation hitting the demand for in-person concert tickets, musicians and labels have seem the opportunity to leverage the brand appeal of bands and celebrities to drive revenue.

Apart from just selling a t-shirt with tour dates printed on the back like we all used to buy from Sgt Pepper's in Greenmarket Square back in the day, some artists are really innovating with their merchandising strategy.

Travis Scott's concert appearance in Fortnite earlier in 2020 appears to have made him far and away more money than a typical in-person concert would.

According to a source speaking to Forbes, Scott's Fortnite concert grossed roughtly $20 million including virtual, avatar merchandise sales.

For comparison, a record-grossing concert on Scott's Astroworld tour last year reportedly reached $1.7 million in a single night. The full tour last year grossed $53.5 million.

Scott's Fortnite event reached 27.7 million unique players, and saw 12.3 million concurrent users in the game.

The take out

The music industry has been compelled to explore alternative models and strategies as technology has disrupted the old faithful models. What has emerged from this evolution is an ongoing business case study that mirrors the significant cultural shifts that we often try explain in more academic ways.

Brand, cultural connection, identify and community, the shifting definition of what carries value in our society - are all key drivers of this fascinating evolution. The music itself has largely just become the cultural currency on which theses artists now base their financial success. That currency is distributed electronically almost for free to boost the other - less replicable - parts of the system that can then be captured as financial value.

What once was, is no longer - and the model of fan engagement has in a way become the unique hallmark of the modern artist itself.