Digital merch platform Hawkr secures £260k funding
Digital live music merchandise firm Hawkr has secured £260,000 (€296,000) in a seed round led by venture capital firm Jenson Funding Partners and other investors.
Launched in 2021 by co-founders Jamie Monson and Les Seddon-Brown, London-based Hawkr aims to streamline the process for artists and fans via a digital platform and data-driven solution to make buying and selling merch at live music events more accessible, profitable and sustainable.
Hawkr is centred around print-on-demand technology and direct-to-consumer sales. Artists can use tools on the platform to create designs, upload the final product to their virtual merch stand and then set the items live during a show while directing fans to the platform via in-venue promotion.
“Hawkr isn’t just improving the live music industry with a platform that makes the merchandise buying and selling process easier for all, but doing it in a way that takes sustainability into account,” adds Sarah Barber, CEO of Jenson Funding Partners. “It’s exciting to be investing in a company that values reducing the carbon footprint of tours and live events alongside the profitability and accessibility that is at the heart of the music industry. We look forward to seeing Hawkr’s continued growth as it makes the merchandise experience better for music fans everywhere.”
“It’s a problem that’s needed a solution for a long time”
Fans are able to browse merchandise on their phones, select their item and have it sent to Hawkr’s print-on-demand supplier. Some 150 artists are currently on the Hawkr platform, and the firm also has partnerships with industry organisations and groups including Marshall Amps, the Featured Artists Coalition, and Brian Eno’s music eco charity Earth/Percent.
Hawkr plans to use the new investment to develop a pipeline of new innovative features, while continuing to build out its partnership network within the music industry.
“When I ran a portfolio of major music festivals for nearly a decade, I got to experience the merchandise world and all the issues that artists and fans go through first hand,” says Monson, Hawkr CEO. “It’s a problem that’s needed a solution for a long time, particularly on the sustainability front where it was often the case where I’d be left with countless boxes of items and be left to find ways of getting rid of it.
“Our marketplace platform helps alleviate all of these pain points and offers a more seamless process for all parties from start to finish. This funding will help us continue to develop our service and expand it to other parts of the world so artists and fans everywhere can enjoy a better experience with merch at live gigs.”
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Silver Lake, Roc Nation invest in merch company Fanatics
Sports merchandise company Fanatics has raised US$325 million from investors including Jay-Z and his company Roc Nation, a joint venture with Live Nation, and private-equity company Silver Lake Partners, which owns shares in TEG, WME, Oak View Group and Madison Square Garden Company.
Headquartered in Jacksonville, Florida, and with international offices in Tokyo and Manchester, UK, e-commerce giant Fanatics sells officially licensed products for the National Football League, Major League Baseball, the National Football League, Nascar and more, and also operates several bricks-and-mortar shops.
The new funding will be put towards launching a non-merchandising division focusing on ticketing, gaming, media and sports betting, according to the Wall Street Journal. The company recently launched a company focusing on NFTs (non-fungible tokens), Candy Digital, and also has a partnership with leading esports competition Overwatch League.
The new investment values the company at more than $18 billion, the WSJ reports. The company expects to make $3.4bn in revenues in 2021.
Last week, the company hired Dan Goldberg, formerly of Warner Music Group, as senior vice-president for music and entertainment development, signalling its intention to branch out beyond sports apparel into music merchandise.
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Merch company Playbill expands in New York
Platypus Productions, part of Australia-based global merchandising group Playbill, has announced the appointment of Steven Downing as chief merchandise officer, live entertainment, based in New York.
Downing brings to more than 25 years’ industry experience, including from the Walt Disney Company and Warner Bros’ merchandising departments, to Platypus, where he will oversee creative, operations and strategic planning for the company’s theatre and live events merchandise division, reporting to Playbill managing director Michael Nebenzahl.
“Steven’s international reputation and successful history in the live entertainment merchandise field is a tremendous asset for us,” says Nebenzahl. “His creativity, dedication and hands-on collaborative approach in support of the world’s most beloved stage productions has earned him a reputation as a global leader.
“Steven has a wealth of knowledge, experience and a unique creative talent, which will support our continued growth in live entertainment merchandising around the world. We’re delighted to welcome Steven to our growing global team.”
The Playbill Group of Companies operates in ten countries, including Australia, New Zealand, Singapore, Hong Kong, Taiwan, Korea, South Africa, Germany, the UK and the USA. Merchandise clients include Les Misérables, Leo Sayer, Tina Arena, The Lion King, the New South Wales Waratahs, Mary Poppins, the Sydney Roosters, André Rieu, Diana Krall and The Phantom of the Opera.
“With live theatre reopening worldwide, I’m excited to work with Platypus during such an important time,” says Downing. “This opportunity allows me to develop new and innovative ways of partnering with producers, supporting each production and brand while elevating the theatre experience. I feel there are no limits to our potential accomplishments in this new era of live entertainment.”
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Dice launches direct-to-fan merch platform
Ticketing and music discovery company Dice has launched Merch on Dice, a direct-to-fan merchandise sales platform for artists.
In the same way as fans can find shows and buy tickets through the Dice app, Merch on Dice will allow them to order limited-edition artist products to pick up at the concert or have delivered. Consumers will also receive notifications and updates about available merch in the run-up to the show.
“We’ve built a beautiful direct to fan, mobile-only shopping experience specifically for live events, making it easy for fans to quickly order limited-edition products that they can pick up at the venue or get delivered to their home,” says Phil Hutcheon, CEO of Dice.
“The success of live streams has propelled the demand for limited-edition, rarer apparel in particular”
For artists, Merch on Dice will enable them to create exclusive limited-run product ‘drops’ in the lead-up to a gig which are only available to fans attending the show and/or live stream.
“In an increasingly virtual world, the need for physical memories are more important than ever. The success of live streams has propelled the demand for limited-edition, rarer apparel in particular,” continues Hutcheon.
“Merchandise will always have a deeply emotional draw on fans – it’s intrinsic to the live experience – and we want to make it better. We’re bringing artists and fans closer through merch on Dice.”
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Sony Music to acquire merch company Probity
The Thread Shop, Sony Music’s merchandise division, is to acquire Probity Europe, a leading independent music merchandising company offering worldwide tour, retail, ecommerce and licensing services.
Probity’s roster of artists includes Metallica, Noel Gallagher, Oasis, Paloma Faith, Rage Against the Machine, Robert Plant and Van Morrison.
Following the acquisition, London-based Probity will become a new division of The Thread Shop, with the existing Probity team serving under company founder Mark Stredwick. Stredwick will report to Thread Shop head Howard Lau.
The takeover of Probity is the third merch-related acquisition by Sony Music since last summer, following similar deals with the US-based Araca Group and the UK’s Kontraband last year. The label’s in-house merchandising business is now home to the likes of the Beatles, Camila Cabello, Jimi Hendrix, Maluma, Led Zeppelin, Lil Nas X, Pink and Rosalia.
“Probity is an established independent leader in the European merch market”
“We are delighted to fully cement the organic relationship we had already developed with Howard and Sony Thread Shop,” comments Stredwick.
“The deal with Sony allows our growing roster to tap into more opportunities globally and benefit from innovative and creatively driven merchandising programs that The Thread Shop deliver with such passion.”
Adds Lau: “We are very pleased to be further enhancing the reach and competitive capabilities of The Thread Shop around the world with the welcome additions of Mark Stredwick and the Probity team.
“Probity is an established independent leader in the European merch market, representing some of the world’s most iconic music artists. Together we can offer our artist clients and the music community an even more robust set of merchandising opportunities to complement their music revenues, branding and marketing.”
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LiveXLive to acquire merch company CPS
Live music media company LiveXLive has agreed to acquire CPS, a leading merchandise personalisation firm, for an estimated US$6 million.
LA-based LiveXLive has seen its core business – livestreamed live music events – grow exponentially this year while concert touring is on hold, having streamed shows by more than 1,400 artists in 2020 alone. In a ‘normal’ year the company also streams content from a roster of partner festivals that includes Rock in Rio, Sziget, Paléo Festival Nyon and Electric Daisy Carnival Last Vegas.
It also owns PodcastOne, a leading podcast network home to more than 300 shows, React Presents, an electronic music promoter formerly part of the SFX network, and a number of other related businesses.
Following the acquisition of CPS, LiveXLive, which trades on the Nasdaq Capital Market, plans to “partner with the music and entertainment industry, as well as stars who have massive social media and marketing reach, to create and distribute unique and limited edition personalized [sic] clothing, jewelry, toys, as well as virtual goods,” according to a market note.
Founded in 2012, Addison, Illinois-based CPS (Custom Personalization Solutions) formerly operated multiple ecommerce businesses, including jewellery company Limoges Jewelry, gift seller Personalized Planet and toy retail business TV’s Toy Box.
“We intend to fulfil super-fans’ dreams with personalised merchandise from their favourite artists”
With over 70 full-time employees, it now focuses on creating an “assortment of personalised merchandise unlike anything in the market”.
“The global licensed merchandise market is expected to reach $400 billion by 2023. This acquisition presents an immense opportunity for LiveXLive to leverage its audience, platform and artist and entertainment-industry relationships to add commerce and specialised consumer product revenues to our music stack and help drive the transaction components of our flywheel business model,” says Robert Ellin, CEO and chairman of LiveXLive.
“By integrating social commerce into our live and original content, we intend to fulfil super-fans’ dreams with personalised merchandise from their favourite artists and shows, directly to the consumer.”
“The worlds of custom merchandise, real-time fulfilment and social commerce driven by celebrity and influencers have collided to create a perfect storm” adds Scott Norman, CEO of CPS. “LiveXLive represents the perfect partner for us to take advantage of this next wave.”
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Universal reports merchandise boom in 2019
Universal Music Group (UMG) has revealed that its revenues from merchandise sales nearly doubled in the first nine months of 2019, boosted by strong demand and a healthy global touring market.
According to UMG parent Vivendi’s third-quarter (Q3) 2019 financial results, merchandising and other related revenues increased by a whopping 82.4% year on a constant-currency basis compared to the first nine months of 2018, “thanks to increased touring activity and growth in retail and D2C (direct-to-consumer) revenues.”
In total, UMG grew turnover 17.5% in the nine months ending September 2019, to over €5 billion (€1.8bn in Q3). France-based Vivendi is currently in the process of selling a 10% stake in UMG to China’s Tencent for €30bn – as well as, potentially, “other partners”, according to its latest financials, “some of whom have already expressed an interest in investing at a similar price level”.
The growth of the music merchandising sector has accelerated in recent years, with merch sales totalling nearly US$3.5 billion in 2018 (though the impact of Brexit is cause for concern in Europe).
Universal’s merchandising division is Bravado, which earlier this year expanded its footprint by acquiring rival operation Epic Rights. Its major-label rivals are also increasingly making inroads into the merchandise space, with Warner Music last year acquiring EMP Merchandising and Sony Music investing in the Araca Group and Kontraband.
Merch grew “thanks to increased touring activity and growth in retail and D2C revenues”
Elsewhere in the Vivendi group, Vivendi Village – the business unit that includes its live entertainment and ticketing activities – grew revenues more than 50%, to €108 million, in the January–September period, bolstered by a strong festival summer and growth for See Tickets in North America.
“Live activities, which include Olympia Production (France), U Live (Great Britain) and venues in France and Africa, recorded very strong revenue growth at €56 million, a strong increase (x2.4),” reads the Q3 financial report. “Vivendi Village now produces 12 festivals that experienced a significant increase in attendance this past summer, especially Garorock in France and Sundown in the United Kingdom.”
Vivendi’s other festivals include Les Déferlantes Brive Festival in France, the UK’s Love Supreme, Poptopia in the US and Universal Music Festival in Spain.
“Ticketing activities are now all grouped under the same See Tickets brand,” continues the report. “Ticketing revenues amounted to €48 million, an increase of 19.5% compared to the first nine months of 2018 (+8.5% at constant currency and perimeter), due in particular to the robust growth of the activities in the Unites States, where revenues doubled in one year.”
In total, Vivendi turned over €4bn (+7.2%) in Q3 2019 and €11.3bn (+6.9%) across the year to date.
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Sony expands merch presence with Kontraband deal
Sony Music UK has acquired London-based, full service merchandise company Kontraband, as the company continues to strengthen its foothold in the music merch world.
Kontraband has operated in the merchandising industry for almost twenty years, under the leadership of Paul Entwistle and Justin Smith.
The company works with clients including Iggy Pop, Kylie Minogue, Bombay Bicycle Club, Maximo Park, the Streets, Enter Shikari and Broadwick Live-promoted festival Field Day.
“We’re hugely excited about joining the Sony Music family,” says Entwistle. “From the very start of our conversations, there was a very clear vision about the role merchandise would play alongside their other services, so it’s a massive opportunity for us to be able to integrate as part of this.
“Kontraband’s reputation was made by approaching merchandise in an innovative and creative manner and we’re looking forward to continuing to deliver this for artists on the Sony Music roster,” adds the Kontraband director.
“Kontraband’s reputation was made by approaching merchandise in an innovative and creative manner and we’re looking forward to deliver[ing] this for artists on the Sony Music roster”
“We are continuously looking for ways to diversify our business and the acquisition of Kontraband allows us to help our artists enhance their brand and deliver new and exciting commercial opportunities,” comments Sony Music UK and Ireland chief operating officer Nicola Tuer.
The move is Sony’s second in as many months in the merchandise sector, following the acquisition of the music division of US entertainment merchandising company the Araca Group.
The music merchandising sector has boomed in recent years, with sales totalling almost US$3.5 billion in 2018. Sony’s major-label rivals Warner and Universal have also their staked their claim in the merchandise space, in the form of EMP Merchandising and Bravado/ Epic Rights respectively.
Kontraband will relocate from its office in Finsbury Park, north London, to the Sony Music headquarters in Kensington.
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Proposed Brexit merch tax will ‘harm grassroots sector’
UK artists travelling to Europe will have to pre-pay import duty and value-added tax (VAT) on all merchandise they bring on tour with them in the event of a no-deal Brexit, according to new UK government guidelines.
European artists entering the UK would similarly have to pay taxes in advance for any merchandise they planned to sell while touring.
Under the regulations, artists would have to complete a long administrative process before embarking on tour with merchandise.
“If you bring goods into or take goods out of the UK in your baggage or a small motor vehicle, and you intend to use them for business, you must declare your goods and pay import duty and VAT before you move them across the border,” reads newly updated government no-deal guidance.
Industry professionals have raised concerns over the impact that such regulations would have on grassroots musicians.
According to Kelly Wood of the Musicians’ Union, the changes represent a “significant problem for touring musicians”.
“It’s a fundamental lack of understanding of the economics of grassroots touring”
“Merchandising is essential for artists, as it can help to balance the books on tours with tight profit margins,” Wood tells IQ. “It’s also an essential ongoing part of an artist’s branding, which can help to grow a fan base and launch and sustain a career.”
Merchandise sales have boomed in recent years, with music merch sales worth nearly US$3.5 billion in 2018.
Merchandise is especially important for the grassroots sector, accounting for an estimated 30–40% of income generated by emerging artists touring in Europe.
“It’s a fundamental lack of understanding of the economics of grassroots touring to imagine that this process is remotely deliverable by new and emerging artists, either practically or economically,” says Mark Davyd of Music Venue Trust (MVT).
“One t-shirt sale is equivalent to 5,000 streams on Spotify, and band merchandise is the most direct way of supporting new and emerging artists,” says Davyd, adding: “We strongly urge the government to think again.”
“Artists are already having to piece together complex travel arrangements, itineraries, contracts and budgets”
The new regulations requires artists to apply for an EORI number, calculate the correct tariff, weigh goods, work out the value of the merchandise and decide on how to declare the goods to customs officials.
“The level of administration that these changes involve will prove problematic to artists who are already having to piece together complex travel arrangements, itineraries, contracts and budgets,” explains Wood.
The taxes on merchandise are not the only additional fees predicted to negatively affect musicians in the case of a no-deal Brexit. The UK’s Incorporated Society of Musicians has calculated that artists will face extra costs of up to £1,000 per year for customs documents, visas, medical insurance and more.
Industry associations, including UK Music and the Musicians’ Union, have repeatedly pushed for a ‘touring passport’ which would allow musicians and their crews to move freely post-Brexit.
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Represent acquires concert merch platform Sidestep
Celebrity merch marketplace Represent has acquired Sidestep, a digital platform dedicated to selling concert merchandise.
Sidestep allows artists to sell products to fans across its website and mobile app, expanding the sales window for sellers and eliminating queuing for buyers.
Artists including Adele, Guns N’ Roses, Selena Gomez and Fall Out Boy have used Sidestep to sell concert merch in the past. Beyoncé is also a fan of the company, investing US$150,000 in Sidestep in 2016.
The integration with Represent, which is owned by personalised apparel company CustomInk, will enable artists to design, market and distribute custom-made merchandise through the platform.
Both Sidestep and Represent, each founded in 2014, have been involved in fan merchandise since their inception. CustomInk acquired Represent in early 2016, in a deal believed to be in excess of $100 million. The apparel company hopes to boost sales further through the Sidestep addition.
“Using Sidestep, artists can ensure higher sales and happier fans by offering easy advance and on-site orders for their fans”
“When you’re at a concert, the last thing you want to be is stuck in line and missing the music,” says Represent’s chief operating officer, Daniel Rosenberg. “Using Sidestep, artists can ensure higher sales and happier fans by offering easy advance and on-site orders for their fans.”
Through the integration with Represent, “artists get access to a full-service solution that helps fans buy new merchandise throughout the year, from viral social media-driven campaigns to tour pre-orders and evergreen fan gear.” adds Rosenberg.
“When we first launched Sidestep, our goal was to super-serve artists in the music industry by bridging the gap between technology and merchandising,” says Sidestep founder and chief executive Eric Jones, who takes on the role of head of music at Represent following the acquisition.
“Our ultimate vision was to extend each concert experience to fans around the world. With this new partnership, we’re in [the] position to fulfill that original goal and vision.”
The music merchandising sector has been booming in recent years, with merch sales totalling nearly $3.5 billion in 2018. Sony Music recently expanded its own merchandise offering, acquiring the music merch branch of US theatre and entertainment merchandising company the Araca Group.
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