Profitable Music Revenue Streams: Mark Merchandise Off The List

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One of the main premises of marketing is: The best way to create profitable relationships with customers is by developing valuable products for them. And music is no exception. Of course, the “record” of the “album” represents the product with the greatest value for fans. But the list does not stop there: T-Shirts, Hoodies, Cups, Posters, Stickers, Mugs and others are often produced as possible complementary source of revenue for musicians.

The rationale is extremely simple: the greater the involvement of the fan with the artist, the greater should be the desire to consume such additional products. Right?

Recently we at MusicStats.org conducted a structured online survey about general music consumption and purchase behavior which also investigated behaviors toward merchandise purchase during concert experiences. Results include responses from 332 participants.

So, what did we find? 

The products we focused on included Posters, T-shirts, Sweaters, Coffee Mugs, Buttons, Stickers and DVDs. These represent the most common products found in concerts, of musicians and bands of different sizes and nationalities.

First of all, results indicated an extremely low purchase behavior across all products. The products with extreme low acceptance were posters, coffee mugs, buttons and stickers. 86.7% of respondents “never” or “rarely” buy coffee mugs, 88% have a similar behavior towards “buttons” and 83.5% towards posters. Plus, all of these products are commonly low price offers, with a very minor profit margin for the artist. So results are even more alarming and suggest that merchandise cannot be considered a profitable revenue stream.

Furthermore, sweaters and t-shirts were the products with greatest appeal. 5.6% responded to have bought a “Moderate amount” to a “A great deal” of sweaters, while 9.2% had a similar behavior towards t-shirts. However, results are still miles away from suggesting such products as a profitable stream for musicians.

Now what?

These merchandise products are and will always be relevant for fans. But the question is: how much financial effort and expectation should bands and musicians place on them?

Clearly not much. The numbers above are a solid proof for what I expected and experienced myself: Merchandise products in the music industry are becoming less and less popular and relevant for fans. It must also be considered that the concert is usually the main moment for purchase, and who would want to carry a product during a concert? if this is an issue, should bands and venues have an additional service to “hold” products for fans while they are watching the gig? Would this help? Perhaps. If the fan is exposed to the merchandise only after a concert, most likely he/she might be influenced by alcohol consumption. This can be a serious negative factor, distancing fans from purchase.

My personal opinion is that normally music merchandise products also have a very short usage life cycle. If you’ve bought it before, you know there is a great likelihood it will soon end up in some corner at your flat and will never be used again.

So perhaps bands and the music industry should place efforts in developing merchandise products that add greater value for fans. The industry has relied in buttons, posters and t-shirts for the past decades and it clearly does not work anymore.

It’s time to be creative and develop better additional products for fans. Just like bands are creative in developing songs and concerts!

For example, how about live broadcasting of shows through Virtual Reality? Or brand and product placement during concerts?

If bands and the music industry in general do not think outside the box, it will be better to write merchandise off as a profitable stream of revenue.

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