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Music

Royalty Profile for Music-based Licensed Merchandise

 

Sector value, U.S. & Canada, 2017: $2.48 billion

Proportion of retail sales of licensed merchandise, U.S. & Canada, 2017: 2.3%

Average royalty, U.S. & Canada, 2018: 8.11%

Royalty range, U.S. & Canada, 2018: 4%–18%

Average royalty, U.S. & Canada, (10 years) 2009–2018: 8.20%

Analysis

There are fewer deal norms for music than for most other categories, and a wider range of royalties—in fact, wider than reflected in the specific responses we tallied. The exceptional range reflects the relative value of superstars versus others.

Historically, merchandise based on music was mostly of the “souvenir” variety— t-shirts, jackets, pins, etc.—whether for sale at concert venues or for general retail distribution. Today, the split is closer to 50/50 venue vs. traditional retail sales.

This varies widely, however, depending on the act. Heavy touring bands tend to sell more merchandise at performance venues, which often generates royalties in the high teens or even low 20% range.

A number of superstars in recent years have sought to leverage their musical celebrity into branding or lifestyle programs, anchored in fashion apparel. These lifestyle programs typically command lower average royalties than venue sales (high fashion apparel might be an exception), but have the potential to generate substantially higher volumes.


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