Music festivals are booming. In the United States alone, 32 million people attended a music festival in the past year and that number is rising. We are long past the days where music festivals were just a crazy grassroots undertaking by a group of friends or a sinkhole of money for a rich guy’s passion project. Now music festivals are an industry, and are huge corporate undertakings.
Music festivals as an investment
There are good things to this shift. Music festivals are now attractive investment opportunities, so there’s actual money being spent on growing and innovating and, for the most part, making the music festival experience better and more comfortable for attendees. There are bad things too though, all the things that come with people who want to turn a profit and who aren’t necessarily into it for just the music.
With the continuing decline in record sales, the notion that millennials prefer experiences to things is being applied here. However, we’re already starting to see that the music festival model may have been a bit of a bubble. At some of the nation’s biggest music festivals, like Bonnaroo and Sasquatch!, attendance has been down.
All bubbles pop eventually
Like any bubble, it is driven by explosive and continued growth. Maintaining constant growth is unsustainable in the long-term in almost all cases, so there comes a point where an industry has to be able to exist and operate under a more stable long-term projection. Otherwise, it’s a bubble and it will burst eventually. And we might already be seeing the decline.
Music festivals are risky business
Because most music festivals take place over the course of a single weekend, individually, they are huge undertakings and are particularly risky. One of the biggest risks is weather. A rained out festival can be calamitous to the bottom line. And yet, as we’ve covered before, climate change is making the weather even more of a risk. I know a lot of festival-goers like to tough it out or say that a music festival in the rain is a life-changing experience, but for the people who have to look out for your safety, being so flippant is not a luxury they can afford. The incident at TomorrowWorld can attest to that.
In fact, these incidents and the increasing risk lead directly to one thing: higher insurance premiums. Every festival carries multiple risks that they must buy insurance to cover. Whenever there’s a high-profile failure, Fyre Festival was a big one for example, insurance companies notice and adjust premiums accordingly. That, in turn, drives up the cost of putting on a music festival, and inevitably, some can’t cover it and fold.
Who lives and who dies?
It’s worth noting that many of the large music festivals fall under the umbrella of a few large companies, AEG, Live Nation, and LiveStyle are a few of the biggest. They’re able to spread the risk around between multiple festivals, which helps offset the risk that one failure will tank the entire venture.
The side effect of this is that many festivals are beginning to look pretty much the same. They deliver an experience that they’ve determined works and rinse and repeat for different markets. It’s not a horrible thing, but it’s worth considering what that does to the music festival industry and the music industry as a whole.
It’s the 1% again?!
If all the festivals are booking the same artists, who’s losing out? The artists who are outside that small group. Thus, you see clustering towards the top 1% or so of artists being represented on the music festival stage. It’s the same thing that happens in digital music streaming (it’s called the blockbuster effect). The only difference is that you can still control what music you listen to.
In the music festival business, someone else is curating that lineup for you. And as I mentioned before, the music festival business, while seeing its share of troubles, is still far outpacing music sales in terms of growth. Smaller and local artists that would have had an opportunity at an independently owned music festival might not have that at the corporate ones.
It’s not necessarily the fault of the music festival companies. It’s risk-averse business practices, they don’t need to, and don’t feel they should, take the risks that an independently run music festival would need to.
The end of the music festival?
At what point does the music festival business model stop working entirely? As expenses go up for music festivals, independently run ones are going to be the first to disappear. It’s already starting to happen. And as the squeeze continues, LiveStyle, Live Nation, and AEG will also have to adjust how they do business. They might be able to right the ship and adjust the model. Or they may have to abandon it entirely.
Demand for live music certainly isn’t waning, but perhaps the future is moving away from music festivals as we know them today. Perhaps the people who are being left behind currently by music festivals will find another solution that will be the future.
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