Merch or Streaming? How Are Artists Actually Making Money During Coronavirus Lockdowns

Author : Marco Sgalbazzini
March, 24 2020

Merch or Streaming? How Are Artists Actually Making Money During Coronavirus Lockdowns

With Coronavirus changing the landscape of the nightlife and electronic music industry in ways never before imaginable, being an artist today is harder than ever. This is especially true for low to middle-tier artists who risk not being able to tour for months with no known end in sight. So how can artists survive? And how can we support our favorite artists through these troubled times? Beyond buying records, merch or streaming seem to be the two logically available answers.

Revenue from streaming hasn’t been enough for most artists to survive on, and unfortunately, it’s not likely that this will change in the months to come. We’d love to see Spotify or Apple Music pay artists and record labels more adequately and especially so in these months under COVID-19 lockdown, but we won’t be holding our breath for that to happen. Since the advent of the streaming age, fans have been able to support their favorite artists through ticket and merchandise sales, and the reasoning is fairly simple: artists have far more control over these, and the majority of the money (or a good portion when it comes to touring) goes right back to the artist rather than pass via many other pockets.

Ali Samadpour, founder of Business Techno, recently described the process for Prescient Digital: “Streaming services like Spotify, which had 230 million monthly users by mid-2019, give artists a large platform to spread their music. While these platforms provide a one-stop-shop for users to browse untapped music genres and artists, the platforms aren’t as kind to the artists. Royalty rates have continued to shift in favor of streaming services, leaving the majority of artists to make $0.006 per stream depending on the platform. At this rate, an artist would need more than 16,600 streams in order to make a measly $100. Likes, comments and streams don’t help the artist’s bottom line nearly as much as other revenue streams – namely, merchandising.”

Samadpour goes on to give the example of German duo Pan-Pot, who have analyzed the merch or streaming conundrum and realized the potential of merchandise:

“It’s always good if you see people running around with your shirts, your logo and your name on it. And with all of the media, it multiplies itself. It’s actually also part of a cultural and traditional thing for artists and labels to do it,“ says 1/2 of Pan-Pot Tassilo Ippenberger. While merchandise was not something they were on top of at first, they now realize this is a revenue stream they should tap into. “For us, it’s not a big revenue thing because we never did it on a bigger scale. We never used it as an extra revenue stream for our own business, but it is something we are planning to improve for the future because there is definitely a lot of potential.”

So let’s look back at our question: merch or streaming? The answer is easy: established artists should utilize merch as a revenue stream, and fans should support artists by purchasing their merch!

While 6AM began as news outlet and event promotion/organizing company, in May of 2019 we launched Shop by 6AM as a merchandising and apparel outlet for the techno and house community. While we are not artists, the same concept Samadpour explores is applicable to record labels, event brands and even nightclubs and music venues. In today’s world merchandising and apparel is not only an extra revenue stream, but also doubles up as an efficient branding and marketing strategy to further your brand and name.

Our Anti Techno Techno Club line is a perfect example of how merchandise can help not only further your brand, but also provide a second revenue stream and one that can be invaluable in moments like these when touring has come to a standstill.

In his article, titled Streaming Vs Merchandising: The Real Money Maker For Musicians, Samadpour goes on to lay out key strategies for artists launching their own merchandising and apparel lines.

If you’re interested in learning more about launching your merchandise via Shop by 6AM, including ways we can help you with this process, please contact us at shop@6amgroup.com