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Don’t knock the rock.
This story first appeared in the October 7, 2009 issue of WWD. Subscribe Today.
Rock ’n’ roll merchandise ranging from graphic T-shirts — the hottest sellers at live shows — to hoodies, tote bags, bracelets, key chains and more, are showing staying power at concerts and gaining traction at major stores such as Wal-Mart, Target and J.C. Penney, said executives of Bravado, Live Nation Merchandise and The Thread Shop, key marketers of the artists and their products.
These purchases, with teens said to be the best customers, are translating into a business estimated at $2 billion to $3 billion worldwide annually at concert venues and in stores — half of it in the U.S.
The allure of rock, pop and hip-hop musicians, including the Jonas Brothers, Miley Cyrus, Kanye West, Metallica, AC/DC, Kiss, The Rolling Stones, Bruce Springsteen and Paul McCartney, is sparking concertgoers to spend an average of $10 to $15 per head to mark their experience at a show staged by the hottest acts, whose products command the highest sales. Besides the cachet of the stars themselves, demand is stoked by a desire to show the world that an act has played one’s town and the concertgoer was there by wearing a T-shirt bearing markers of the occasion: the tour’s name, date and location.
“Bands can do hundreds of thousands of dollars a night, depending on how big they are,” Michael Krassner, executive vice president of retail and licensing at Live Nation Merchandise, said of audience demand. “The issue is: Are the tickets being sold, rather than are the merch numbers the same?”
While many of these souvenirs are priced within a predictable range, say, T-shirts at $15 to $40, big draws can pull considerably more for an item: an AC/DC leather jacket for $250 and hockey jersey for $150, or a Paul McCartney hoodie embellished with peace fingers and “’09” on the breast for $70 and an oversize program on heavy stock for his Summer Live ’09 tour for $30.
“Apparel is the biggest driver in this business,” said Mathew Vlasic, vice president of merchandising at The Thread Shop, a Sony Music venture Vlasic started about two years ago, which he said has grown into a “multimillion-dollar business” through its wholesale unit and online boutique. In the U.S., T-shirts typically generate 80 to 85 percent of concert sales, versus 70 percent in the U.K. and 40 percent in Japan, said Dell Furano, chief executive officer of Live Nation Merchandise.
“The Brits and the Japanese love their programs and books,” Furano added of the two nationalities that spend 30 percent and 60 percent, respectively, of their outlays during live music events on such items.
At performances of artists considered a notch below megastars in their power to build audiences and sell product, like Lady Gaga, concertgoers are spending $5 to $10 per head, said Tom Bennett, chief executive officer at Bravado, a unit of Universal Music, whose sales of rock merchandise account for one-third of the sector’s business.
Among the artists whose live shows are resulting in top-performing merchandise sales this year, entertainment executives said, are Coldplay, Pink, Kings of Leon, Madonna and Iron Maiden. Big numbers are anticipated for U2, now on a tour that kicked off Sept. 12 in Chicago; Kiss, which hit the road Sept. 25 in Detroit, and Depeche Mode, which resumed concerts Oct. 1 in Guadalajara, Mexico.
Beyond the sheer popularity of bands, cravings for collectibles — and simply to have something tangible in hand — during a time of music and movie downloads is keeping demand for rock memorabilia growing at a low-single-digit rate.
“There’s a need or a want for stuff,” said Tom Cording, vice president of media relations at Sony Music-Legacy Recordings. “Even though we download music to our iPods and our cell phones, there’s nothing that’s going to replace buying a T-shirt at a concert. Everybody’s very merchandised. There’s everything but floor wax, at this point.”
Demand was feverish at McCartney’s Summer Live ’09 concerts at Citi Field in New York, with products bearing the legendary Beatle’s image, name or signature, plus food and drinks, reaping sales of about $1.2 million for his three dates in July, said Dave Howard, executive vice president of operations for the New York Mets. People at those shows spent an average of $11 each on merchandise, food and beverages, about double the $5 to $6 average during Mets games.
Among concerts at Citi Field and its predecessor Shea Stadium, fans bought the most souvenirs at shows staged by McCartney, Billy Joel and Springsteen, Howard said. “Shea was a larger venue for Bruce Springsteen and new merchandise was created specifically for those shows, so it probably did the best dollarwise,” he recounted.
Joel’s concerts were the last at Shea; McCartney’s the first and only ones at Citi Field.
Music lovers’ desire to have a memento, gain some street cred and enjoy a shared experience are compelling concert audiences to purchase event T-shirts. “That will always be your best-selling shirt,” Live Nation’s Krassner said. “Assuming you have a good graphic, it will far outsell other shirts.”
Quick response is sometimes needed to satisfy demand for the most-sought-after styles during a tour.
“Historically, people at certain concerts want certain things: black shirts, purple shirts,” Krassner said. At some shows, Live Nation analyzes sales data each morning from the previous night’s performance and decides “which ones to print more of and which ones to pull, if they are dogs,” he said. “We have printers standing by,” in proximity to concert venues. “We have blank garments. We are able to shift gears with speed.” American Apparel, for example, sells T-shirts to 10,000 screen printers around the country.
Some of the hottest items are not exclusive to the live shows. “Viva La Vida” Ts for Coldplay’s 2009 tour, which ended Sept. 19 in London, are available on the group’s U.K. Web site, coldplay.com, for 22 pounds, or $36.39 at current exchange rates. Mock-vintage versions of tour Ts from The Rolling Stones’ 1981 U.S. tour can be bought at high-end purveyor trunkltd.com for $99.
The public’s desire to don things emblematic of rock stars, Furano said, might grow along with the popularity of video games like the new Guitar Hero 5 and The Beatles: Rock Band, released Sept. 9 by Harmonix Music Systems, which offers gamers a chance to play realistic miniversions of John Lennon’s Rickenbacker guitar and McCartney’s Hofner bass in time with Beatles music and videos.
Rock merch shook off the stigma of being uncool in the early- to mid-Eighties, Furano noted, during high-impact tours such as the Stones’ “Tattoo You (1981-1982),” Springsteen’s “Born in the U.S.A. (1984),” and Madonna’s “Like A Virgin (1985)” — seminal moments in transforming musical artists into “their own franchise.” Furano estimated $30 million worth of merchandise, at prices lower than today’s, was sold during Springsteen’s “Born in the U.S.A.” world tour.
Pricing of concert Ts varies from those sold in traditional stores. Tags on the tops sold at live events are structured to allow for the payment of various fees, such as those taken by the entertainment venues, the concessionaires and the performing artists themselves. “The same way you’d pay $9 or $10 for a beer at a ballgame, these fees are built into the price of a shirt,” The Thread Shop’s Vlasic said. “The fees fluctuate; the bigger acts get more money.”
In big arenas and amphitheaters, venue fees are “huge,” Vlasic said, ranging from 25 to 30 percent of merchandise sales, “so we try to either bring the price of the products down or add value, like packaging a T-shirt and CD together for a little off each. A musician’s business is nothing without fans, so you want to appease fans.”
Consignment commissions taken at Citi Field and Shea Stadium on merchandise, food and beverage sales for the venues’ big shows — including Springsteen, McCartney and Joel — ranged “between 20 and 25 percent of sales, net of sales tax,” Howard said.
Prices of rock T-shirts sold in retail settings vary. At the SoHo boutique What Goes Around Comes Around, a hard-to-find vintage rock top like a blue “Rolling Stones Tour of America ’75” T-Shirt (Mayo Spruce, 100 percent cotton) is $600, and a yellow “Wings Over America” shirt (Heavy BVD, 100 percent cotton) is $298. In Hot Topic’s online store (“Everything about the music”) $20 will buy a Rolling Stones “Tour of America 1978” mock-vintage T with a distressed image of lips and tongue-as-American-flag. Kiss graphic T-shirts go for $5.99 at new Kiss Korner shops that rolled out nationwide at Wal-Mart on Tuesday to coincide with the band’s tour.
“When you have a shirt from a certain concert and someone else does, you get a nod on the street,” said Jen Roberts, a principal owner of Woodstock Ventures, a production and merchandising company, originally formed to stage the Woodstock Music and Art Fair in 1969. “There’s a shared experience, a recognition factor. People tend to flock to people like themselves.”