[abap_rocky]

I was reading an interview with the band "Agriculture" recently and they had a really interesting take on this. From this interview https://www.treblezine.com/agriculture-interview-quiet-viole... :

"DM: We exist as a band because we sell t-shirts. Our job is that we sell t-shirts and the way we promote those t-shirts is by playing music. If we were talking strictly economically, that’s just a fact.

LL: Weirdly, it’s also our most direct engagement with the money we make and with our fans. We’re often selling our own shirts at the merch table; that’s actually how we talk to a lot of fans and get feedback on our sets. We get cash in our hands; that’s one of the most direct economic exchanges in our lives as musicians. So, it is funny because it seems cynical, but it’s actually one of the more grounded exchanges in what we do."

As it turns out, I had a nice little chat with their drummer when I bought one of their tshirts.

[ageitgey]

It's very smart of them to recognize that.

The world is full of these weird business cases where people aren't aware of the actual product, like how Starbucks US morphed from a coffee shop into an iced dessert drinks company that also incidentally sells hot coffee.

Edit:

Other fun examples -

In the mid-2000s, Porsche was an incredibly successful hedge fund that also sold cars who tried to acquire VW using a short squeeze.

Most US airlines are profitable frequently flier points companies that also operate airplanes to justify the program.

Target US is a real estate company that operates also (profitable) stores.

[matthewkayin]

I don't know if the Starbucks example is quite the same as the band example. If anything, their focus on iced desserts shows that they know exactly what their audience wants and is paying for.

When I think about the band shirts, I think about this time an indie game dev youtuber did a full breakdown of their different revenue streams. They were a "full time indie gamedev", but the overwhelming majority of their income came from gamedev Udemy courses.

So really, they were an online course seller that used their gamedev youtube content to convince people to buy the courses.

[btilly]

The reality is that Starbucks is the world's biggest unregulated bank, with their claws in the real estate industry. Who got that way by selling the experience of hanging out in a convenient coffee shop.

Their business has run into trouble a couple of times because MBA types in the company lost sight of this, then focused on trying to sell drinks efficiently. Thereby diluting the brand and business.

If you've got 22 minutes, https://www.youtube.com/watch?v=Ym7YwFq8ZuM is a very informative walkthrough of the history and the business by the always funny youtuber, The Fat Electician. Highly recommended.

[lokar]

IMO, they, like many other companies, were doomed by the constant chase for growth. Once they had a large share of "have a milk-coffee drink in a nice lounge" market, growth slowed. But having a large market share, good margins and growth that is the same as population/gdp (+/-) is just not acceptable.

So they try to find a way to get more growth, even if it changes and perhaps kills what the business was.

[btilly]

There's more to the story than that.

Around 2000 the founder stepped away, and MBAs brought in automated machines. They were more efficient and consistent at making the drinks than the baristas, and business tanked. The founder came back in 2008, got rid of the machines, and brought the baristas back. Business took off again.

It really is the experience that is being sold.

[andai]

In the context of AI automation I keep coming back to "cute Starbucks barista" as the archetypal automation-proof job. Because the job isn't producing the beverage, but the little moment of human interaction. (Especially these days, when not much of it remains!)

Same goes with supermarket checkout. I noticed many people intentionally take the line where the human scans your stuff. They enjoy it!

Unfortunately many zoomers do not appear to have been informed of this fact, and will give you a worse experience, "humanity wise", than the self-check out machine!

When you treat your job as robotic, aside from making the experience worse for all involved, you are also competing with actual robots, i.e. competing on speed, price and consistency, which is not a great place for a human to be.

[nunez]

I'm assuming you're talking about those Clover machines. They were really, really good and well designed IIRC. Trying to automate the barista with them; well, that's where they messed up!

[lokar]

Yeah, I guess if you can't grow revenue, the next best thing is to grow profit by cutting costs (or try both at the same time).

[lokar]

Honestly, their espresso has always been undrinkable, IMO

[butlike]

That's implying your identity is what makes you money. It doesn't have to be.

[Forgeties79]

to add to this, the iced dessert drinks are still caffeinated, so they still fill the purported role of a Starbucks.

[lokar]

Well, not the original role. That was to bring some americanized version of European/Italian coffee culture to the US. Serving espresso based drinks in a comfortable public cafe style setting. It was very popular for a long time. Busy cafes full of people, selling lots of drinks, opening new shops, etc.

[andai]

> They were a "full time indie gamedev", but the overwhelming majority of their income came from gamedev Udemy courses.

Obligatory "in a gold rush, sell shovels" ;)

[estearum]

Starbucks is also (one of?) the largest payment processors in the world, with also a perpetual like ~$2B float from its customers

[socalgal2]

> Most US airlines are profitable frequently flier points companies that also operate airplanes to justify the program.

Freakonomics Radio had a series about airlines. They claimed this was not true and that frequently flier points only accounted for 5% of profits.

https://freakonomics.com/podcast-tag/freakonomics-radio-take...

WSJ said it was true:

https://www.youtube.com/watch?v=mTTW8RDJUEE

I don't know who to believe.

[SoftTalker]

The version I've heard is that airlines are credit card companies that also fly passengers on airplanes.

Also the one about Target being a real-estate company I've also heard about McDonald's.

[socalgal2]

My understanding is that's true for McDonald's. They own all the stores and rent them out. Target owns its stores but does not rent them out.

[nunez]

It's not true.

I thought it was also, so I looked at United Airlines 2024 Annual Report to confirm or deny my position. [^0]

If you look at their revenue sheet, you'll see that UAL made ~$51B from passenger revenue (tickets sold * available seats across their entire fleet) while they made ~$24B from "other revenue", which includes, amongst other things, annual fees from credit cards.

Same with Delta, though they made ~$10B from their "other" revenue. [^1]

However, it's a bit of a positive feedback loop situation. The "other" revenues in these 10-Ks don't tell the whole story.

Airline frequent flyer programs have tiers with minimum flight and spend requirements per tier. This benefits both frequent flyers and VFR customers (visiting friends and relatives).

If you travel a lot for work (frequent flyer), there are very heavy incentives to get to that top tier. Customer service at the highest tiers is eons better than what you'd get at lower tiers. You also get priority boarding, first-crack at upgrades, upgrade certificates that move you to the top of upgrade lists, and more. These benefits make air travel, which many people don't like doing, much more tolerable.

If you're an infrequent flyer, getting to that airline's mid-grade tier usually gets you more free checked bags and priority boarding. Checked bags are EXPENSIVE after the first freebie (thanks, Southwest!) which is usually enough of a draw to get people to chase that status. (If you live near a hub, you can gamble and hope that the gate agent offers to check bags gate-side for free to speed up boarding, but that's not foolproof. Anyway, checking baggage is a fool's errand; one-bag for life!).

Getting the airline's co-branded card usually provides bonuses that make it easier to hit those tiers. So you get the card and put all of your personal (and corporate, if your company allows it) expenses on the card.

Airlines also have gotten very aggressive about pushing the card onto gen pop. You're almost certainly going to get hit with a 60-80k mile offer on every flight you take in the US for spending ~$3k on that airline's co-branded card, no matter the airline. (It's almost always enough for a round-trip ticket to some coveted location in the US, on an award flight, which are harder and harder to come by, but that's another topic for another post.)

United flew 173M customers in 2024. $3k card spend from even 10% of those customers is $52M! And that's before you consider that most people will continue spending on credit cards after earning the spend benefit! (However, at $0.01/mile earn rate, the $14M worth of flights United would be beholden to is recorded as a "frequent flyer deferred revenue" liability. But, again, the chase for status and benefits would generate more revenue that's hard to forecast, though I'm sure the airlines have forecasting models in place.)

If this interests you, and if you like math, "The Global Airline Industry" by Belobaba et. al. is a fantastic book that explains this and other peculiarities of how airlines work. This was recommended to me by an old colleague that ran a small airline. It's excellent.

[^0] https://ir.united.com/static-files/d4c854c7-427c-49a9-8129-d...

[^1]: https://s2.q4cdn.com/181345880/files/doc_financials/2025/q4/...

[cm2187]

And McDonald’s is known to be primarily a real estate company. Berkshire Hathaway is meant to be an insurance company. Military aircraft manufacturers are really maintenance companies.

[cucumber3732842]

Now do the International Code Council, and Harvard, and Unicef, and government departments, and, and, and.....

The reason we don't evaluate things in this "measure what is actually goin on" manner is because the actual goings on are only able to go on as they do so long as a public image that emphasizes something else is maintained.

People wouldn't go to starbucks in the manner they do if they thought of it as a sugary drink place.

[nitwit005]

> Target US is a real estate company that operates also (profitable) stores.

They're exactly as much a real estate company than a mom & pop store that owns their space. They just have a lot of stores.

[VBprogrammer]

Or Blockbuster being a massive real-estate company. Or McDonald's for that matter.

[ljm]

Similarly Wether spoons, the chain of pubs in the UK.

More interestingly, they tend to set up in historically significant or listed buildings and as a result, preserve them. Not unusual to find a Spoons set up in an old 19th century bank or something.

[neutronicus]

On the other hand, the naming of Blockbuster[1] makes more sense with that context.

[1] https://en.wikipedia.org/wiki/Blockbusting

[pc86]

Because Blockbuster Video played a pivotal role in early-1900s segregation in the United States?

I think it's much more likely it's just a reference to extremely popular and economically successful movies but happy to be proven wrong.

[saalweachter]

The movie term derives from a different piece of slang, a WWII term for a large bomb that could destroy an entire block.

Before movies bombing was a bad thing, a successful movie was "exploding" like a blockbuster bomb.

[MathMonkeyMan]

Yeah I heard it describes a movie where the line to get into the theater went around the block.

edit: ah, but wiki disagrees <https://en.wikipedia.org/wiki/Blockbuster_(entertainment)>

[pixl97]

Car manufacturers being financial/loan organizations is another.

[rationalist]

RV companies are more-so that than car companies.

RVs are put together by methheads and there are less protections (such as no lemon law for RVs) for the consumers. Many RVs spend there whole one year warranty period in the shop with no actual fixes being done and then the warranty runs out. The people that do hear about RV problems, buy new thinking that will be less problems, when in fact the newer RVs are the lower quality ones that have issues. There are YouTube channels dedicated to this phenomenon (https://youtube.com/@LizAmazing), and why one famous consumer lawyer (Steve Lehto) says "You Must be INSANE to buy an RV These Days": https://youtube.com/watch?v=xElhTNS_xn8

A great video where one major manufacturer does not even properly VIN their RVs leading to a $600,000 fine given to one RV owner: https://youtube.com/watch?v=zGOANydJURQ

[hydrogen7800]

Or that GM is a bank that also sells people the collateral for loans (i.e. cars).

[NikolaNovak]

1. I understand the truth of it

2. The inefficiency bugs me

I.e. I want to support the band, but feel like only a fraction of the money spent on merch goes to the target. Same with websites that have mugs and such. I don't want another mug, I don't want to pay 5.99 for shipping, I don't need to support the white box oem mug manufacturer.

But I guess in the real pragmatical world, that's the support mechanism that actually works :)

[dylan604]

> I want to support the band, but feel like only a fraction of the money spent on merch goes to the target.

Maybe you don't have any friends that are in a band, but if it's the band members or friends of the band selling the merch, they are getting 100% of the profit. They design the shirts, they pay for the printing of the shirts, they then sell the shirts directly with their own hands. There's no middleman taking cuts. Now, if you're buying their merch from some 3rd party website, that site probably takes a cut. Some bands selling merch on their own website could still be coming directly from the band if one of them, or again a friend, sets up the site with their own accounts using square/stripe/etc and deals with the fulfillment themselves they are minimizing cuts as well.

[wongarsu]

I guess they are technically not middle men because they sit one the start of the value chain, but the company making the t-shirts, the one selling it and the one printing on it are still making good profits. On top of the actual costs of making those printed t-shirts.

I imagine it's not hugely expensive at the volumes bands need, somewhere from $3-10 per t-shirt depending on quality, and maybe double that for hoodies? And if you are buying online shipping and handling, which is another $5-10 that I'm paying and isn't going to the artist. Not a huge deal. But if you don't care about the physical product and just want the band to have some money that's still a good bit of inefficiency

[dmm10]

Slight correction: I just received an advertising blow-in from Ollie's listing Hanes and other brand women's tees for $1.99 each. That's for short sleeve, long sleeve or tank top in various colors. The indicated competition is stated to sell them for $2.49. Not that this is RETAIl pricing in the U.S.A.. I'm guessing wholesale will be even less.

[nextaccountic]

the t-shirt itself benefits the band because it's free advertising, it keeps the band on the radarof your friends etc. even if you wanted to paypal them, they would probably prefer you to buy (and wear!) t-shirts

[dylan604]

For your generous PayPal donation, please accept our gift of a free t-shirt as a way of saying thank you.

[genericone]

And to all a good tax-writeoff.

[dylan604]

well, now you're getting needlessly pedantic in a way that just makes me wonder why would someone do that. seriously, nobody expects that a band is weaving fabric by hand to cut into patterns to sew into shirts. everyone here understands that you have to buy the shirts at your expense to sale at a mark up that earns profit. what a ridiculous thing to argue

[wongarsu]

Alternative framing that sounds less pedantic: Nobody was complaining about middlemen in the first place. The argument you responded to was "I don't need to support the white box oem mug manufacturer". Meanwhile you were talking about the opposite end of the value chain, which in no way refutes any of the complaints made.

More importantly you were also missing the point. The issue is how much of the $20 you pay end up in the hands of the band. Where in the value chain that money is spent doesn't matter. What matters is how much is spent on delivering the t-shirt to my doorstep and how much is in the band's bank account

[smcg]

Merch is the most profitable thing for the band. They can mark it up however much they want. $35 tee shirts are very profitable.

[abap_rocky]

Yeah, also the fact that most venues take a cut of merch sales really dampens the idea that buying merch directly from artists is the best way to put money in their pocket.

I even recall going to a show many years ago where the lead singer refused to sell his t-shirts at the venue and implored us all to meet him outside at their tour van for direct sales. I don't think he got invited back to perform there!

[MidnightRider39]

Never heard about venues taking a cut off the merch - that’s fucked up… They already take (in almost all cases) 100% from drinks and bar sales. In my experience the ticket sales and merch go completely to the artist. Anything else I would consider a rip-off

[longwave]

In larger UK venues this has been happening for some years now, there is a campaign against it: https://thefac.org/venuedirectory

This has been followed up by similar action in the US as well: https://weareumaw.org/my-merch

[tastyfreeze]

That is certainly the case with many venues in the US after the LiveNation/Ticketmaster merger. Independent venues are much more rare, due to the LiveNation monopoly, but make their own deals with talent that are reasonable to both parties.

LiveNation operates so much of the venue spaces they can take whatever they want. Artists have been complaining to congress about it since the merger in 2010.

[pc86]

It's the only thing that works at scale.

If you want to support them you're more than welcome to message them and ask for their Venmo, or reach out to their agent (if they have one) or them directly and ask who to make the check out to. That just doesn't work at scale.

[Imustaskforhelp]

> I.e. I want to support the band, but feel like only a fraction of the money spent on merch goes to the target. Same with websites that have mugs and such. I don't want another mug, I don't want to pay 5.99 for shipping, I don't need to support the white box oem mug manufacturer.

I know some musicians are using Patreon but patreon takes a cut as well.

Now Although I don't like github but one of the last things that I like about github is that github sponsorships don't charge anything extra than the costs it would have itself and you get chargeback protection.

Would there be a genuine interest in using Github for sponsorships by Musicians, are there any real world musicians* who are doing that?

[MidnightRider39]

Just give them money directly without the merch. Or purchase their music, most (small) bands sell it directly as well.

[dylan604]

If the band signed with someone to help produce the album you're buying, they probably owe a cut to cover the costs of recording, mixing, cutting/pressing, releasing that album.

[gamerdonkey]

MC Frontalot and MC Lars had a fun take on this same concept in "Captains of Industry", which you may enjoy, depending on your feelings on old nerdcore hip-hop.

https://www.youtube.com/watch?v=XTrKmP7oU9U

It's pretty funny, and includes Fronalot's characteristic wordplay with lyrics like:

> Captains are we. Of what? Industry.

Which could also be taken as:

> Captains are we, of what industry?

[apgwoz]

I was hoping someone made this comment! It remains high on my list of Frontalot songs. Big fan of “I’ll Form the Head” and “Stoop Sale” also from that album as well.

[nunez]

Great band!!! The Spiritual Sound is an excellent album.

As far as this interview: I mean, that's every band ever; the music is an ad for their shows and merch, which is the product. Some, like these folks, come to grips with this easier/quicker than others!

[rglover]

Agriculture has just joined my rotation thanks to this story. The process works.

[pchristensen]

Now go buy a t-shirt!

[Triphibian]

Great band, cool shirts. Gotta say all the Flenser bands got the memo on strong merch.

[MengerSponge]

In the same way, LeBron James has earned more money from selling shoes than playing basketball.

[georgeecollins]

I think all this talk of entertainment economics is missing the point of the article. Yes, today bands more money from tshirts then recordings. However, in the 70s and 80s they typically made a lot of money from LPs and CDs. In the time of the Ramones, that was how bands made money.

The point is that punk rock was culturally very influential but never very musically popular. God Save the Queen was a hit record but that is the outlier.

I think it is useful to consider that a lot things that endure are not the things that were popular at the time, particularly with music. I saw the Pixies at the Hollywood Bowl a couple years ago and it occurred to me that when they had recorded the songs they are known for I saw at venues not much bigger than bars. They were never really that popular. Or Elliot Smith, who was seriously obscure in his short lifetime.

[Triphibian]

The argument has been made that punk finally broke in '91 with Nirvana and then Green Day and myriad other pop punk bands selling records. And there's also a case for the bands, especially of the '77 era New York scene breaking, but doing it by playing less textbook punk-sounding music (Blondie, Talking Heads, etc).

I do think The Ramones were robbed in way. If radio at the time wasn't ready for them, classic rock radio now should be. Most of them play The Clash already.If Blitzkrieg Bop is too weird or raw, "Rock 'n Roll Radio" is polished enough that it would fit right in.