Bandmerch Surfs The Web

Donn Delson's goal is to "think outside the T-shirt."

Delson, the founder and president of 5-year-old music and entertainment merchandising company BandMerch, believes the business has unlimited sales potential. "We take the approach that the revenue pie is infinite," he says. "You make the pie bigger by being proactive."

BandMerch offers interactive promotions driven by online business. Its products can be ordered directly through its Web site (bandmerch.com) or through links on an artist's home page.

Delson points to a promotion the company spearheaded last spring for its original client, Linkin Park, as a prime example. BandMerch produced a pre-tour T-shirt available only through its online store. With each shirt, the purchaser received a coupon redeemable at merchandise booths on the tour for a free, exclusive embroidered patch.

The total Linkin Park merchandise pie increased, Delson says, because many coupon-bearers bought additional merchandise at the shows.

Another interactive promotion surrounded Megadeth's winter tour. Fans who purchased a special CD/T-shirt bundle through the BandMerch-run band site could submit a demo for evaluation by Dave Mustaine. The Megadeth frontman chose three winners, who received a personal critique and a guitar package worth more than $3,000.

Such promotions increase BandMerch's business while boosting an act's brand, Delson says, and will serve as a major part of most upcoming relationships. "We see ourselves as a marketing merchandising company that builds brands for the artist," he explains.

Agoura Hills, Calif.-based BandMerch has about 50 employees and generated $20 million in revenue in 2004. It works with 50-60 acts, designating a staff product manager for each act. Last year, the company opened an office in New York's SoHo neighborhood.

BandMerch offers four merchandise services: touring, licensing, retail and online stores. Touring and retail are its largest revenue generators, according to Delson.

In the tour merchandise area, BandMerch differs from such large competitors as Signatures Networks (which works with more than 125 acts) in that it does not offer advances.

"We'll do a lot of 80/20 net splits, where the artist and us share in the revenues after expenses are deducted," Delson explains. (The artist gets the bigger share.)

Zig Zag Communications' Drake Sutton-Shearer, who manages rock act Trapt, notes that the band's "per heads" have increased since it worked with BandMerch on its last tour.

The company has created custom road cases that contain special lighting and signage for tour setup. Additionally, it uses satellite-driven credit-card machines on tour, which Delson says can increase sales 10%-15% a night.

"Our experience is that [BandMerch employees] are great salespeople, and they look for opportunities to increase their business and ours," Sutton-Shearer says. "We'll use them online for our next album cycle."

Delson says this year the company is pursuing co-branded deals that cross-pollinate the Web and touring. ••••